8 Things To Know About San Francisco Property Tax Rates

Owning a new home in San Francisco is an exciting accomplishment for many individuals and families due to the stunning environment and location.

However, it’s easy to get caught up in picking new colors for your building or setting up a move date, and then forget your tax responsibility as a property owner. Yikes!

Essentially, once you own a home in San Francisco, you join the list of individuals who combine to generate $2 billion for the city annually. This funding helps the government engage in important projects for the city like building new schools, better hospitals, and repairing damaged roads.

As a new owner in the San Francisco area, you must understand the important factors of the city’s tax to avoid future complications or scams.

Below are the top 8 things you need to know about San Francisco Property Tax Rates.

1. Cost of San Francisco Property Taxes

It’s important to clarify that San Francisco property taxes are not fixed amounts as they often change every year due to the property’s assessed value. An assessed value is a financial worth given to a property for tax purposes. In other words, your home’s assessed value determines your property tax rates.

Ultimately, the tax rate is measured using this assessed value as the city currently collects 1.18% of a property’s assessed value. To be precise on how much you’ll need to pay yearly for owning a home in San Francisco, consider contacting an expert real estate agent to ask your questions.

It’s also worth noting that whenever a house changes ownership – like a home sale – the property will receive a new assessment value, mostly based on the sale price. This reevaluation will be performed by the office of the Assessor-Recorder, meaning the previous tax of your property before buying it may not be the same with your new ownership.

2. Property Tax Payment Date

San Francisco charges property tax on the fiscal year, which begins on July 1st and ends on June 30th, resulting in tax years referred to as 2019/2020, 2020/2021. During this fiscal year, the city lets property owners pay their taxes in two equal installments.

The first installment occurs from July 1st through December 31st, and the second installment covers January 1st through June 30th. Nevertheless, the government issued tax bills to homeowners during the last week of October, and the payments are due on November 1st and February 1st.

*Note: Tax payments are considered to be delinquent on December 10th and April 10th.

3. Homeowners Exemption

If your recently purchased building functions as your primary place of residence, you may be eligible for an exemption. A Homeowner Exemption provides you with property tax savings by decreasing your property’s assessed value, meaning you pay less on taxes and invest the money somewhere else.

This impressive offer can reduce up to $7,000 off your San Francisco home, resulting in your $70 to $80 off your property tax. However, to qualify for this exemption, you must own – or co-own – a property and live there yearly. Therefore, rented, vacant, secondary homes or unoccupied properties don’t qualify for this offer.

To acquire a homeowner exemption, apply for a file with the San Francisco assessor and await their response.

4. Tax Increase

While a home owner’s exemption can help reduce the financial load, specific factors can raise the amount you pay. One example is converting places like the garage to a rent-worthy living space or renovating the kitchen to look more modern.

These factors raise your tax higher because they affect the assessed value of the house. So, ultimately, any action or inclusion that raises the value of your home automatically increases tax payments.

5. Destination of Property Taxes

Property taxes function as additional sources of income for the government, enabling them to fund schools, projects, hospitals, fix roads, improve transportation, build better hospitals, create parks, and better handle emergencies.

These factors are essential to the community as hospitals, schools, and better transportation aids the development of a balanced society, while parks, monuments, and other structures encourage tourism and the area’s visual appeal.

Ultimately, the tax goes to the government and is put back into the local area to improve the people’s lives. Paying taxes isn’t fun, but it does serve a purpose.

6. Paying Property Taxes

Fortunately, San Francisco possesses two ways individuals can fulfill their taxes: via the internet or traditional mailing methods. In the latter, the details are forwarded to the City and County Tax Collector, P.O. Box 7426, San Francisco, CA 94120-7426, according to Treasurer and Tax Collector.

On the other hand, you can pay your taxes online with your credit/debit card alongside your Assessor’s Identification Number (AIN) to search and retrieve payment information. This method is more convenient as the servers are open 24 hours a day and accept payment at any time.

7. Why San Francisco Property Tax Rates Change

Every year, the government and council decide on how much is needed to operate, keep the city balanced, and estimate how much revenue will come from other sources besides property taxes.

These sources could include grant funding and user fees. Eventually the amount is subtracted from the total money needed. The remainder is what the city will collect via property tax to keep the community balanced all year.

For example, if the state needs $2,000,000 to operate and expects to receive approximately $600,000 from other non-tax sources, the property tax required will equal $1,400,000. Afterward, the council decides that property owners should fund $800,000 of the $1,400,000; therefore, if the total resident assessment is valued at $100 million, the tax rate becomes $800,000÷$100 million equals 0.0014%.

8. Rectifying a Problematic Property Assessment Value

Before you can pay taxes, the value of your home needs to be assessed, but the final result may seem problematic if the value seems unfair or incorrect. Fortunately, if you have complaints regarding your property’s assessment value, you can contact the assessor.

Assessors are open to conversation, but even if, after the conversation, you’re still unsatisfied with the results, you can file a written complaint to the city’s assessment review board, as long as you file it within the defined complaint period.

This factor is crucial as a high assessment value on your property can significantly affect your taxes and your bank account in general.

Final Thoughts

Ultimately, taxes are essential to the community, especially one as popular and successful as San Francisco. They help the government balance the community investments.

It’s key to remember your tax rate is determined by the government and your home’s value, meaning the more expensive your property is, the higher your taxes.

If you wish to purchase a home in one of San Francisco’s best neighborhoods consider contacting the Mike Plotkowski Team of professional real estate agents to help you scan through the area and find the best long-term option.