WHAT IS PROPERTY TAX?
Property tax is the yearly tax paid on property owned by an individual or legal entity such as a Corporation. It is calculated by the local government where the property is located and paid by the owner of the property. In San Francisco, property tax is handled by the CCSF Office of Assessor-Recorder. The tax is usually based on the value of the owned property, including land. Property values fluctuate over time, depending on improvements and/or the value of surrounding properties.
HOW THE TAXABLE AMOUNT OF YOUR SAN FRANCISCO HOME VALUE IS ASSESSED
After your purchase, State law (Proposition 13, passed in 1978) requires the assessors office to set a new taxable value for your home. The law says that this value, called the assessed value, should reflect the market value (not necessarily the purchase price) of the property as of the date of transfer. Every year thereafter, your assessed value cannot go up by more than 2% if nothing has changed.
HOW TO ESTIMATE YOUR PROPERTY VALUE
If you paid market price for your property, your new assessed value will likely be the purchase price. However, there are times when the price paid is not the market value, such as property bought under duress or property was sold at a below market price to family members. In these cases, we are required to use the market value. To plan conservatively, a reputable realtor can research the sale prices of other comparable properties in the same neighborhood close to the date of your purchase to estimate market value.
HOW MUCH WILL MY PROPERTY TAX INCREASE
Real property is reassessed upon change of ownership and, in certain circumstances, the construction of improvements. The new assessed value is equivalent to the purchase price and is subject to being increased by no more than two percent each year.
WHEN ARE SAN FRANCISCO TAXES DUE
Property taxes run on their own fiscal year beginning July 1st and ending June 30th. This is why tax years are referred to as 2020/2021 or 2021/2022. Payments are made in two equal installments with a December 10th and April 10th deadlines. Expect your tax bill to arrive in the last week of October.
Last year, the April 10 property tax payment deadline was not extended during the pandemic. Therefore we do not anticipate that the property tax payment deadline will be extended in 2021.
It is important to be aware of supplemental taxes. No surprises, as we like to say. Often property is transferred (bought and sold) and property tax bills are sent out before the Assessor’s Office has had time to reassess the value of your property and update their records. In these cases, supplemental tax bills are issued to “catch up” on those taxes. For a handy calculator and more info visit the assessor’s supplemental tax page.
NOTEWORTHY PROPERTY TAX DATES
January 1: Lien date for all taxable property.
January 4: First day to file claim for homeowners’ or disabled veterans’ exemption.
January 4: First day to file the Business Property Statement, if required or requested, with your county assessor (last day to file without penalty is May 7).
February 1: Second installment of taxes for property assessed on the secured roll is due and payable.
February 10: Last day to file a claim for postponement of property taxes under the State Controller’s Property Tax Postponement Program.
February 16: Last day to timely file claim for homeowners’ or disabled veterans’ exemption.
April 1: Business property statements are due.
April 12: Second installment of taxes for property assessed on the secured roll must be paid by 5 p.m. or close of business, whichever is later, to avoid a late penalty.
May 7: Last day to file the business property statement without penalty.
July 2: First day for property owners to appeal the value of their property appearing on the regular assessment roll by filing an application for changed assessment with the clerk of the county board of supervisors or county assessment appeals board.
Note: The time period for filing an application is extended under certain circumstances if the taxpayer does not receive timely notice of assessment.
August 2: Taxes due for property assessed on the unsecured roll due and payable.
August 31: Taxes for property assessed on the unsecured roll must be paid by 5 p.m. or close of business, whichever is later, to avoid a late penalty.
September 15: Last day to file an application for changed assessment with the clerk of the board or assessment appeals board. The regular appeal filing period runs from July 2 through September 15 in counties where the assessor has provided value notices by August 1 to all assesses of real property on the secured roll. In all other counties, the filing period runs through November 30.
Note: Even where the assessor has provided such notices generally, the time period for filing an application is extended under certain circumstances if the taxpayer does not receive timely notice of assessment.
November 1: First installment of taxes for all property assessed on the secured roll is due.
November 30: Last day to file an application for changed assessment in counties where the assessor does not provide value notices by August 1 to all assesses of real property on the secured roll.
December 10: First installment of taxes for property assessed on the secured roll must be paid by 5 p.m. or close of business, whichever is later, to avoid a late penalty.
December 10: Last day to file late claim for homeowners’ or disabled veterans’ exemption.
December 10: Last day to pay annual tax on private railroad cars without late penalty.
When you need help determining property taxes on the home you live in or want to buy, give us a call at Legacy Real Estate. We are experts at determining property values and will be happy to help you navigate through San Francisco property tax rates and values.
FREQUENTLY ASKED QUESTIONS
Q1. I disagree with the assessed value. I believe the market value of my property at the time I bought it was lower, what can I do?
A1. You have the right to formally appeal the value to the Assessment Appeals Board (AAB) (www.sfbos.org/aab). Remember, a formal appeal on a supplemental assessment must be filed with the AAB within 60 days of the issue date of your Notice of Supplemental Assessment. Even if you have filed an appeal and it is pending, you are still responsible for paying your property tax bill on time to avoid penalties.
Q2. How do I account for what a previous owner already paid?
A2. The former owner is responsible for property taxes during the time they own the property. However, because the prior owner may have already paid property taxes in full for the entire year or perhaps paid no property taxes at all, it is important for you to communicate with the prior owner to settle accounts. Note that many new homeowners work with professionals like their escrow agent or real estate agent to make sure that any property taxes already paid or not paid by the previous owner is accounted for when you close your purchase transaction. You can also contact the Office of the Treasurer & Tax Collector (a separate office) to understand what has been paid.
Q3. What if I also make changes to my home?
A3. Generally, construction projects other than normal maintenance and repair are considered “New Construction”, which are re-assessable under State law. Common assessable projects include adding a room or converting part of a garage. So, if you recently bought a property and carried out new construction on it, it will be reassessed to reflect the market value because of the ownership change and it will include an additional assessment for the market value of the construction.
Q4. Are there property tax savings programs for homeowners?
A4. If you live in the home you own, you may qualify for a Homeowner’s Exemption. This exemption reduces $7,000 from your assessed value, which will help you save about $70-80 per year. Other tax-saving opportunities include (more info on the SF Assessor website):
- Disabled Veterans’ Property Tax Exemption
- Parent-Child or Child-Parent Transfer Exclusion (Prop 58)
- Grandparent-Grandchild Transfer Exclusion (Prop 193)
- Replacement Residence Exclusion for Senior Citizens (Prop 60) &
- Disabled Persons (Prop 110)