Property Tax in San Francisco is an ad valorem tax (meaning a tax based on value) imposed on real estate. The tax rate is applied to the net assessed property value as determined by the San Francisco County Assessor, which uses the purchase price as the baseline for determining assessed value.
In California, there are three broad categories of property (real, personal and utility) and three corresponding tax rolls (secured, unsecured and utility or state-assessed). For property taxes, we are referring to the real property tax. The annual property tax rate is made up of two amounts:
- A maximum base rate of 1% – as established by Proposition 13, which was passed in 1978. The first is the one percent countywide maximum rate set by Proposition 13 in 1978.
- Any voter-approved overrides (i.e. for bonded indebtedness).
San Francisco’s 2011-12 property tax rate is 1.1718%.
The tax rate varies slightly from year to year. The tax rate in previous years has been:
- 2010-2011: 1.1640%
- 2009-2010: 1.1590%
- 2008-2009: 1.1630%
- 2007-2008: 1.1410%
- 2006-2007: 1.1350%
In addition to the ad valorem property tax (the tax based on your purchase price), there are also additional “flat-fee” special assessments that are the same amount for every property holder that will be added to your property taxes. These add-ons are generally unit or parcel-based, and some examples include the Rent Board Fee, the School Facilities Safety Special Tax (a parcel tax), and the Apartment License Fee. San Francisco residents also pay a Mello-Roos fee of about $32/year, a charge that was passed after Loma Prieta to help rebuild schools.
The pie chart below shows the breakdown of the real estate property tax rate for the 2010 – 2011 San Francisco property tax rate:
Real property tax revenue in San Francisco made up about 22% of the City’s $7.454 billion budget for the 2010-2011 fiscal year. Additional revenue comes from state and federal subventions, other taxes and revenues, and charges for services.
Before Proposition 13 passed in 1978, each local government with powers of taxation (counties, cities, school and special districts, etc.) could levy a property tax on the property located within its boundaries. Within certain restrictions, tax rates were determined independently. Prop 13 changed property taxation by:
- Setting the maximum countywide tax rate at one percent (1%) – the statewide average had previously been 2.67 percent.
- Limiting growth in the assessed value of property to the lesser of inflation or two percent per year, unless ownership of the property changed. Assessed values from the fiscal year 1975-76 serve as the base for real property assessments that haven’t changed ownership.
When property is purchased, newly constructed, or changes ownership, the property tax is re-assessed based on the purchase price.
On July 1, 1983, California State law was changed to require the reassessment of property as of the first day of the month following an ownership change or the completion of new construction. In most cases, this reassessment results in one or possibly two supplemental tax bills being sent to the property owner in addition to the annual property tax bill. Not all changes in ownership of property result in reassessment. The following are some examples that don’t trigger a re-assessment:
- Interspousal transfers
- The transfer, sale, or inheritance of property between parents and their children
- The addition of joint tenants