SF: Sue Your Way to Heath and Happiness- or at Least to Lower Property Tax

Newbie buyers need to know how much their property tax will add to their mortgage, especially in high end markets like SF where we already go way out of our comfort zone– and do so just looking at the price of the home alone.

Unless a home is sold or altered, property assessments to determine tax rates cannot be increased by more than 2% annually, thanks to CA State Proposition 13. Prop 13 ensures that real property is reappraised only when a change of ownership occurs, or upon completion of new construction.

Property tax in this city is under the domain of the Assessor-Recorder. When a sale is successful, the Assessor’s Office then determines if a reappraisal is required, and if so, will determine the current market value of the property. According to the San Francisco.gov site for the Assessor-Recorder, the owner has the right to appeal the value.  Good luck with that.

An easier way to lower taxes might be to try to join SF’s most current property value lawsuit. The Chronicle explains:

Despite rising commercial rents and sales prices throughout 2007, some real estate owners argue their properties shed hundreds of millions of dollars in value last year and are seeking as high as seven-figure tax refunds from cash-strapped San Francisco.

Applicants in the top 10 biggest cases before the city’s assessor-recorder’s office — all involving office buildings, luxury hotels or retail centers — are professing a nearly $1.2 billion drop in collective worth last year, suggesting a $13.2 million rebate. As of Feb. 29, San Francisco property owners argued their buildings, land and related possessions collectively lost about $3.4 billion in taxable value during the last few years — potentially a $38.6 million rebate.

You can even peruse a  database, provided by the San Francisco Assessment Appeals Board, which “includes all appeals of city real estate values for the 2007 roll year, whether they have been rejected, withdrawn, decided or are pending.”

Meanwhile, you want to seriously think about property value when you make an offer on a home. You should be aware of the unit’s sales history, the neighborhood’s performance, and any other factor that might play into the assessment that will determine your property taxes. Here are a few listings you might practice your savvy on:

226 Ritch #103: 1/1.5 work/live loft. Short sale and over 50 days on the market. Now listed at $579,000 down from $599,000.

101 Crescent Way, #2416: 2/2 condo for $498,000 (down from $529,000). District 10 is getting hammered, so certainly a case could be made for lower property values– and with 70+ days on the market, a lower offer.

1025 17th St., #2: Potrero 1/1.5 live/work loft. Purchased for $463,000 in 2004, whatever the current owner pays is tax is a lot less than you’ll pay if you close on the asking price of $615,000. Consider the property’s been on-market 80+ days, and proceed.

3835 Scott St. #203: this Marina property shows some trouble even in swank town. Sales history is as follows:

Other salient details: This is a 1/1 condo with parking, on the market now 200 days.

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Art credit: Harry Chen Thinks Aloud