A Guide to Property Taxes in San Francisco City and County
(NOTE: For informational purposes only. Consult with your tax professional for details on your particular tax situation.)
Property taxes play a crucial role in funding essential services like public schools, infrastructure, public safety, and parks in San Francisco. If you're a homeowner or prospective buyer in this city, understanding how property taxes work is essential to budget effectively and make informed decisions. Here's a detailed overview of the property tax system in San Francisco City and County.
How Property Taxes Are Calculated
In San Francisco, property taxes are primarily governed by Proposition 13, a California ballot measure passed in 1978. Under Prop 13, the maximum general property tax rate is capped at 1% of a property’s assessed value, with additional local taxes and assessments bringing the effective tax rate to around 1.16% of the assessed value.
Assessed Value
The assessed value of a property is determined by the San Francisco Assessor-Recorder’s Office. When a property is purchased, the assessed value is based on the purchase price. This value can only increase by a maximum of 2% annually, regardless of changes in the property's market value, unless there is a significant event like the sale of the property or new construction, which can trigger a reassessment.
Supplemental Taxes
When a property changes hands or undergoes significant improvements, a supplemental tax bill may be issued. This bill reflects the difference between the prior owner’s assessed value and the new, higher assessed value. New owners will typically receive this bill in addition to the regular property tax bill.
Additional Taxes and Assessments
While Proposition 13 limits the base property tax rate to 1%, San Francisco properties are subject to a variety of voter-approved assessments, special taxes, and bonds that fund local projects and services. These can include:
School Bonds: Bonds that fund improvements to San Francisco's public schools.
Parcel Taxes: Fixed taxes that fund specific city services such as schools or transportation improvements.
Mello-Roos Taxes: Special taxes that fund public infrastructure in newly developed areas.
Together, these additional taxes usually add about 0.16% to the base 1% rate, though the exact total may vary based on the location and specifics of the property.
Key Dates for Property Taxes in San Francisco
In San Francisco, property taxes are due in two installments:
First Installment: Due on November 1st, delinquent after December 10th.
Second Installment: Due on February 1st, delinquent after April 10th.
Tax bills are typically mailed out in October, so property owners have a clear window to make payments on time.
Property Tax Exemptions and Relief
There are several programs in place to offer tax relief or exemptions to qualifying homeowners in San Francisco. Some of the most common ones include:
Homeowner’s Exemption: This exemption provides a $7,000 reduction in the assessed value of an owner-occupied residence, reducing the tax bill slightly.
Senior Citizen Property Tax Postponement Program: This state program allows eligible seniors to defer property tax payments on their primary residence.
Disabled Veterans Exemption: Veterans who meet specific disability requirements may qualify for significant reductions in property taxes on their primary residence.
Impacts of Proposition 19
Proposition 19, passed in 2020, brought changes to how properties are reassessed when transferred between parents and children. Under Prop 19, children can still inherit the family home without a reassessment to market value, but only if they make it their primary residence within one year of the transfer. Additionally, Proposition 19 allows certain homeowners (age 55+, severely disabled, or wildfire victims) to transfer their existing assessed value to a new home anywhere in California, which can result in substantial property tax savings.
What Happens if You Don’t Pay Your Property Taxes?
If property taxes go unpaid in San Francisco, the property can be subject to penalties, interest, and potentially even tax-defaulted property status, which can eventually lead to a property tax sale after five years of delinquency. It's essential to pay your taxes on time or arrange payment plans if you're struggling to avoid such outcomes.
Conclusion
San Francisco’s property tax system, while straightforward on the surface, is influenced by various laws, voter-approved assessments, and exemptions. Homeowners and prospective buyers should familiarize themselves with how taxes are calculated, the impact of Prop 13 and Prop 19, and key dates for payment to avoid any penalties. For specific questions or concerns about your property taxes, the San Francisco Assessor-Recorder's Office is the primary resource for detailed information. Understanding this system can help you navigate the local real estate market with confidence.