San Francisco is a unique town in so many ways, including property tax. Unlike the rest of the state, San Francisco is actually a combination of a city and county in one jurisdiction. However, that didn’t give the municipality any kind of an exception when Proposition 13 passed in 1978. Along with the other 51 counties in the state, San Francisco property taxes were capped under a major law change that couldn’t be easily reversed absent a super-majority vote. As a result, property taxes today in the City are a mix of the traditional restrict base found in every county of California as well as an assortment of add-ons for specific purposes.
Property Tax Calculation Background
Assessed value is a bit of a tricky concept. Prior to Proposition 13, it was a bit up to each county to define. The Proposition swept the board clean and stated by law that assessed value became the 1975-1976 market value with a capped level of inflation. Yet when the property changed hands in a sale, ownership or new construction, the new assessed value could reign supreme, again resetting the floor going forward but at whatever higher level it was at that point in the future. This was anticipated to eventually reset every property tax base as it changed hands in eventual sales.
Again, thanks to Proposition 13, San Francisco’s base property tax rate is 1 percent of the assessed value of a property, and that figure is capped in terms of any kind of increase at 2 percent annually or whatever the state’s inflation rate might be at the time. However, Proposition 13 did not restrict or bar the imposition of additional fees on a property. This power was still left to the local jurisdiction and its voters. No surprise, San Francisco being one of the more liberal areas of the California, a good number of additional costs have been passed by the local voters for the local collective good. In other jurisdictions, these would have been seen as taxes and shot on sight.
The San Francisco County Assessor’s office is the agency in charge of determining and assessing property tax in the City/County. With the additional assessments, the property tax levied can be much more than other jurisdictions. For example, in 2009-10, the figure for a typical San Francisco residence was 1.159 percent of assessed value. San Francisco’s full tax summary covers the following charges in detail:
- City and County of San Francisco – +0.766%
- San Francisco Unified School District – +0.301%
- San Francisco Community College District – +0.058%
- Bay Area Pollution Air Quality District – +0.002%
- Bay Area Rapid Transit District (BART)- +0.011%
Price Comparison Across the State
In comparison to other counties, San Francisco is an expensive combination. Not only does the jurisdiction have the highest costs of real estate in California, it also has one of the highest combinations of property tax formulation as well. It’s clear that buying and owning real estate in the jurisdiction is not a low income venture, both up front or for the long-term either.
For example, in comparison to Sacramento to the northeast, San Francisco is easily a quarter to a half percent higher in annual tax. In comparison to San Diego, however, San Francisco is astronomical. The city on the border with Mexico is well above a half percent lower. And Shasta, California, is just a smidgen above 1 percent, which is also well below that of San Francisco.
In comparison to the rest of the country and major urban areas, San Francisco’s property tax rate is not outrageous. For example:
- Most of New York state pays between 3.49 percent and 3.76 percent.
- Milwaukee, WI gets a bill based on a 3.68 percent rate.
- Chicago, IL runs near 2.3 percent.
- Bridgeport, CN hovers just under 2 percent.
- New Jersey sits at 2.38 percent.
- The State of Texas averages 1.9 percent.
- Nebraska with all of its land available also charges 1.84 percent.
There are some places that are far lower, however. Maui County, HI pays only 0.17 percent in property tax, combined with living in paradise.
Adjusting to Living There
San Francisco property taxes are not for the meek and budget sensitive. Then again, not much about the City by the Bay has much to do with frugality. Anybody who has spent some time in San Francisco proper knows that it is an expensive place to live at any time of the year, whether he be a homeowner or renter. Add in the costs of property ownership, and the cost just goes up more. No surprise, many who live in San Francisco also end up earning notable incomes, but that seems to be balanced in a karmic fashion with the cost of living there.
One traditional way to offset the higher property tax hit is, of course, to utilize the monthly escrow payment ahead of time and build up the funding to pay the taxes when they come due. Obviously, this is not required in every situation; some prefer to work out a purchase and lending so that no such mechanism is in place. They manage their bills without assistance. This, however, requires planning because that tax levy hits very quickly, and San Francisco is well-known for changing the additional fees and assessments on top of the property tax rate every year.
Going Forward in the Future
San Francisco as a community and municipality is unlikely to lower its property tax rate anytime soon. Again, most of its add-on fees are calculated and assessed to pay for multiple services the majority of residents would not want to do without. These include the transportation system, local education including the community college, the infrastructure of the City government, and much more. In fact, it’s very likely that more fees could be added in the future, increasing the general cost of living for homeowners who already pay the highest cost of real estate on average.
2 Point Highlight
In comparison to Sacramento to the northeast, San Francisco is easily a quarter to a half percent higher in annual tax.
San Francisco as a community and municipality is unlikely to lower its property tax rate anytime soon.
