It’s that time of year again — San Francisco property tax season. Paid in two installments, property taxes are paid in November/December and February/April. That is, the first installment will be due on November 1st, and considered delinquent after December 11th. The second installment for this year will similarly come due in February 2018, and be considered overdue some time in April.
So, if, by November 1st, you still have not received your bill, we suggest that you contact the Tax Collector, through the SFGOV Property Tax Site. Be also aware that any property you have recently purchased may necessitate a supplemental bill, to be paid alongside your primary bill.
It’s no secret that San Francisco property taxes are going up. 1978’s Proposition 13 s a nominal limit on property tax increases at 2% per annum, (or the rate of inflation), but additional increases or special taxes can be approved on a case-by-case basis, like last September’s (2016) 0.008% supplementary increase.
San Francisco Property Tax and Real Estate
But it’s not so grim! Though the property taxes continue to increase, the real estate market is absolutely thriving, more than offsetting the tax increases. Indeed, when considered against the value of the investment, the taxes are relatively conservative. The 2% increase cap is calculated from a base value, according to the purchase price as listed on the deed. Since property values are going up faster than taxes (considerably more than a paltry 2% annually), the best way to maximize your San Francisco property investment is to buy the most expensive property you can afford, as soon as possible. Put another way, the 2020 taxes will be considerably higher on the same property if it’s bought in 2019 versus 2017.
That brings us to another point about taxes, and the San Francisco housing market: the Capital Gains Tax. With such surging increases in sale prices, many homes and properties are sold for a considerable profit. If you’ve lived in a home more than two years, you will be given a capital gains exemption up to $250,000 (for an individual) or $500,000 (for a couple or family), but many homes are sold for considerably more than that. If you are planning to sell any San Francisco real estate, your Realtor will be able to walk you through the potential taxation implications, to help you budget accordingly.
So, with November fast upon us, here’s what you should be doing to keep your taxes paid. For starters, you should (already) be budgeting for them. Though property taxes are paid in two large installments, they are often calculated as a monthly or weekly amount. Factor this into your annual mortgage payment for simplicity, or set it aside separately, but either way, you’ll have it at the ready come tax season.
Odds are you will already have your bill in-hand (and if not, you can get one). These can be paid a number of ways, including online through that same portal.
For those of you considering changing your property tax situation (buying or selling a home, acquiring an income property, and more) please give Danielle Lazier + Associates a call! We’re ready to craft the very best San Francisco real estate strategy for you.