July 31, 2023
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.
After your purchase, State law (Proposition 13, passed in 1978) requires the assessor's 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.
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 the property sold at a below-market price (ie. to family members). In these cases, the assessor's office is 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.
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. The secured San Francisco property tax rate for Fiscal Year 2022-23 is 1.17973782%.
Property taxes run on their own fiscal year beginning July 1st and ending June 30th. This is why tax years are referred to as 2022/2023 or 2023/2024. Payments are made in two equal installments with a December 10th and April 10th deadlines. The Assessed tax value is mailed out in July and you have until September 15th to contest!
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.
You can learn more about supplemental taxes in our hand guide CLICK HERE.
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. The City & County of San Francisco open filing period for a formal appeal of your 2023/2024 regular assessed property value is open between July 2, 2023 thru September 15, 2023.
The Appeals Process: The above video was developed as a collaborative effort between the Board Taxpayers' Rights Advocate and the County-Assessed Properties Division. It's lengthy, so feel free to skip to 1m 59s to avoid the intro.
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):
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