Unlock the Secret: How to Slash Your SF Property Taxes Today!

Written By Danielle Cui

Unlock the Secret: How to Slash Your SF Property Taxes Today!

An Expert Guide for Homeowners Facing Declining Property Values

Introduction

Hey there, fellow homeowners. If you are here, you've probably felt the pinch of those hefty property tax bills, especially as home values have taken a nosedive in recent years. I remember opening my tax assessment last year and thinking, "Wait a minute, my condo isn't worth that much anymore!"

But here's the good news: You don't have to just accept high property taxes. There are practical steps you can take to reduce them, and they're more accessible than you might think. In this guide, we'll walk through everything you need to know to potentially save thousands on your property tax bill.

Property Tax Fundamentals

How Property Taxes are Calculated

First things first—let's demystify how property taxes work and take San Francisco for example. Your property tax bill is based on your property's assessed value, which is supposed to reflect its market value. Thanks to Proposition 13, the assessed value can't increase by more than 2% per year unless there's a change in ownership or new construction.

But here's the kicker: In a declining market, your assessed value might still be higher than what your property is actually worth. That means you're paying more taxes than you should!

Assessed Value vs. Market Value

  • Assessed Value: The value placed on your property by the county assessor for tax purposes.
  • Market Value: What your property would sell for in the current real estate market.

When the market is hot, these two numbers are pretty close. But when property values decline, a gap can form—one that can cost you money.

Why Property Values are Declining—and What It Means for You

Recent Trends in large cities

For large cities like San Francisco, Los Angeles, Miami, and Seattle, etc., the real estate market has always been a rollercoaster, but recent years have been especially wild. Economic shifts, remote work trends, and other factors have led to a significant decline in condo values.

Don't Wait

The decline in property values isn't just a statistic—it's a signal that homeowners need to act now to appeal their property tax assessments. Don't wait; taking prompt action could result in substantial savings on both your current and next tax bill.

Common Questions About Property Tax Appeals

How Do I Appeal My Property Tax Assessment?

Take San Francisco for example, the process involves submitting an application to the San Francisco Assessment Appeals Board. Don't worry; we'll break down the steps in the next section.

What is the Deadline for Filing a Property Tax Appeal in San Francisco?

For the regular assessment period for 2024 taxes, appeals must be filed between July 2 and September 16. Mark your calendar!

Do I Need a Lawyer or Consultant to Appeal My Property Taxes?

Not necessarily. While professionals can offer expertise, many homeowners successfully appeal on their own. It's all about preparation. Lawyers typically charge by a percentage (such as 35%) of your tax savings. That is roughly $400 for every $100K they can reduce for you.

How Much Can I Save by Appealing My Property Tax Assessment?

Savings vary, but if your assessed value drops significantly, you could save thousands on your annual tax bill. That is roughly $1200 for every $100K reduced from your property assessment.

The Property Tax Appeal Process Step-by-Step

Step 1: Determine Your Eligibility

Compare your property's assessed value to its current market value. DO NOT just look up the estimates on Zillow, as those estimates are not considered evidence by the assessors and in the hearing. You need to collect actual sales of comparable properties, in a specific window.

Personal Anecdote: When I help my friends with property tax appeals, they often reference the current estimate on Zillow. However by the time they check Zillow's estimates in September, it has been more than 5 months past the comps sales window (end of March). When markets are volatile, this creates significant discrepancy between Zillow estimates and what is accepted by the appeal process - actual comp sales.

Step 2: Gather Necessary Documentation

You'll need:

  • Application for Appeal
  • Evidence of Market Value
    • Recent comparable sales (sales of similar properties in your area)
    • Optional: a professional appraisal report

Step 3: Complete the Application Accurately

Fill out the form carefully. Double-check for errors, as mistakes can delay the process.

Step 4: Submit Before the Deadline

Remember, the filing period is July 2 to September 16. Late applications aren't accepted.

Step 5: Prepare for the Hearing

  • Organize Your Evidence: Create a clear, concise presentation.
  • Practice Your Explanation: Be ready to explain why your property's market value is lower.

Step 6: Attend the Hearing

You'll present your case to the Assessment Appeals Board. It's less formal than a court, but professionalism counts.

Step 7: Await the Decision

After the hearing, the board will mail you their decision. If successful, your property taxes will be adjusted accordingly.

Tips for a Successful Appeal

Collect Strong Evidence

  • Comparable Sales: Find at least three properties similar to yours that sold for less. When selecting comparables (comps), consider key factors such as:

    • Proximity: Choose properties in the same neighborhood or as close to your property as possible.
    • Property Type: Ensure the comps are the same type as your property (e.g., condo vs. condo, single-family home vs. single-family home).
    • Size: Look for properties with similar square footage and the same number of bedrooms and bathrooms.
    • Age and Condition: Select properties built around the same time and in similar condition—renovations or deteriorations can affect value.
    • Sale Date: Use the most recent sales, preferably within the last six months, to reflect current market conditions.
    • Amenities and Features: Consider comparable properties with similar features like parking spaces, views, outdoor areas, or upgrades.

  • Create compelling arguments: While it costs money upfront, an appraisal can be powerful evidence.

Avoid Common Mistakes

  • Missing the Deadline: Late applications won't be considered.
  • Insufficient Evidence: The more solid your proof, the better your chances. One of the most common mistakes is people using comps outside the allowed window. For example, comps after March 31 will not be considered for the appeal.
  • Errors on Forms: Simple mistakes can cause delays or denials.

Understand the Hearing Process

  • Be Professional: Dress appropriately and be respectful.
  • Stay Focused: Stick to the facts about your property's value.

Frequently Asked Questions

How Often Can I Appeal My Property Tax Assessment?

You can appeal once per assessment year.

Can Condo Owners Appeal Their Property Tax Assessments?

Yes! Condo owners have the same rights as any other property owner.

Can I Appeal My Property Taxes Online?

Currently, some cities require appeals to be filed via mail or in person. But currently San Francisco accepts online appeal.

How Does Proposition 13 Impact Property Tax Appeals in California?

Prop 13 limits annual increases in assessed value but doesn't prevent reductions. In fact, it supports temporary reductions during market downturns through what's called a Proposition 8 appeal.

Will Appealing Affect My Future Assessments?

A successful appeal adjusts your assessed value for the current year. Increases in subsequent years are still subject to Prop 13's 2% cap.

Is There a Risk My Property Taxes Could Increase if I Appeal?

While rare, the assessor could determine your property is undervalued. However, this is uncommon when appealing due to a market decline.

What If I Recently Purchased My Property?

Your recent purchase price is strong evidence of market value. If you bought at a lower price than the assessed value, you have a solid case.

Additional Resources

Conclusion

Taking the leap to appeal your property taxes might seem daunting, but it's a path well worth exploring. By understanding the process and arming yourself with the right information, you can take control of your property taxes and ensure you're not overpaying.

So why wait? Review your property assessment, gather your evidence, and consider filing an appeal. Your wallet will thank you!

Remember, this guide is here to help, but everyone's situation is unique. Don't hesitate to reach out to a professional if you need personalized advice.

Danielle Cui
Next

Inside the Assessment Appeals Board Hearing: A San Francisco Homeowner's Experience