Are your property taxes too high?

January 21, 2010

It’s a good news/bad news situation. If your home is worth more than you paid for it, most people would agree that that’s a good thing. And if your home is worth more than you paid for it, you are likely paying the right amount of tax and so are not eligible for the scenarios described below. However, if your current assessed value is more than the fair market value of your home minus $7,000, you may be eligible for a reduction in your assessed value for the purpose of property tax calculation.

If you believe your home may be eligible for a reduction in property taxes based upon a decline in value, there are two ways you might proceed: an Informal Review by the Assessor’s office and/or a Formal Appeal with Assessment Appeals Board. The Formal Appeal, in particular, can be a complicated and time consuming process. Generally speaking (it all depends on the neighborhood and other details of your purchase), homes purchased 2005 through mid-2008 have the best cases for a property tax reduction. Declines from Peak Value (whenever that occurred) typically run in the 15% to 25% range. If your appeal is successful, the reduction in assessed value only applies to the 7/1/10 – 6/30/11 tax year. A decline-in-market appeal is only good for 1 year, the year for which it is filed. The Assessor’s “valuation date” is January 1, 2010 and any sales comparables submitted must have closed before March 31, 2010.

Informal Review

The SF Assessor’s Office has announced that they will now accept “Requests for Informal Review of Assessed Value” for tax year 2010/2011. Such requests must be filed by March 31, 2010 and apply only to single-family dwellings, residential condominiums, townhouses, live-work lofts and cooperative units. Last year 3,432 requests for informal review resulted in 1,683 reductions of assessed values for SF properties in tax year 2009/2010.

One can email the Assessor’s office with questions (Assessor@SFGOV.ORG), as well as call or visit the Assessor’s office to speak with the appraisers that are on duty (415-554-5596). And the SF Assessor’s website offers information regarding Decline-in-Value Informal Reviews: http://www.sfgov.org/site/assessor_index.asp?id=115404 

FAQs as Posted by the SF Assessor’s Office

Q1: I BELIEVE THE MARKET VALUE OF MY PROPERTY IS LESS THAN MY CURRENT ASSESSED VALUE. HOW DO I PROTEST MY VALUE?

First, check your current assessed value at http://gispubweb.sfgov.org/website/sfparcel/index.htm. Second, if the assessed value is higher than the market value, you have the following options:

1. REQUEST AN INFORMAL REVIEW (single family dwellings, residential condominiums, townhouses, live-work lofts and cooperative units only) – From January 4, 2010 to March 31, 2010, the Assessor will accept requests to review the market value of your property. Your request must be in writing by completing an application or submitting your request online with supporting evidence of your opinion of value. If you were granted a reduction for the year 2009-2010, we will automatically review your assessment for the year 2010-2011 to determine whether a reduction is still warranted, Send your request to: Assessor-Recorder, ATTN: Prop. 8, 1 Dr. Carlton B. Goodlett Place, City Hall – Room 190, San Francisco, CA 94102. Mail-in requests for an informal review must be U.S. postmarked by the March 31, 2010 deadline. By Fax: (415) 554-7915 or E-mail: InformalReviewRP@sfgov.org. Be sure to keep a copy for your records.

2. FILE AN ASSESSMENT APPEAL (All property types) – From July 2, 2010 to September 15, 2010 you may file an Application for Changed Assessment with the Assessment Appeals Board (AAB), an independent body established to hear and resolve valuation disputes between the Assessor and taxpayer. A $30.00 filing fee due at the time of application and the AAB will schedule a hearing for you at a later date. Applications may be obtained by contacting the Assessment Appeals Board – Clerk of the Board at 1 Dr. Carlton B. Goodlett Place, City Hall – Room 405, San Francisco, CA 94102, by phone: (415) 554-6778 or directly from their website: www.sfgov.org/AAB.

Q2: CAN I, AS THE OWNER OF A SINGLE FAMILY DWELLING, DO BOTH PROCEDURES?

Yes. If upon the receipt of your annual Notice of Assessed Value, which will be mailed at the end of July 2010, you disagree with the assessed value, you .can file an assessment appeal with the Assessment Appeals Board. Please see instructions above.

Q3: WHAT DOES MARKET VALUE MEAN?

Market value is the price a property would sell for when the property is put up for sale in a competitive and open market.

Q4: WHAT IF MY CURRENT ASSESSED VALUE IS BELOW MARKET VALUE?

The Assessor is required to enroll the lesser of your factored base year value (assessment) or the market value. For example, if the market value (what you could sell your house for) of your property as of January 1, 2010 is $500,000 and your assessed value is $200,000 the Assessor would enroll the $200,000 as your taxable value. You would not qualify for a lowered assessment.

Q5: WHAT TAX YEAR AM I APPEALING?

The assessed value being appealed will cover the fiscal year from July 1, 2010 to June 30, 2011.

Q6: WHAT TYPE OF INFORMATION WILL I NEED TO PROVIDE TO SUPPORT MY CLAIM?

You will need to submit sales information and/or an appraisal performed by a licensed real estate appraiser to support your claim. The sales information or appraisal’s date of valuation should be near the January 1, 2010 lien date but no later than March 31, 2010.

Q7: IF THE ASSESSOR OR THE ASSESSMENT APPEALS BOARD AGREES TO REDUCE MY VALUE, WILL THE NEW ASSESSMENT BE PERMANENT?

No. The reduction is temporary and only applies to the tax year being appealed. Once a reduction is made, the assessor is required by law to annually reappraise the property until its fair market value exceeds the factored base year value.

Q8: WHY ARE TENANCY-IN-COMMON (TICs) UNITS EXCLUDED?

Unlike residential condominiums and cooperative units, TICs do not have separate parcel numbers. A review of a single TIC unit is more complex. TIC owners can appeal their taxes by filing an Application for Changed Assessment with the Assessment Appeals Board beginning July 2, 2010 thru September 15, 2010.

Q9: WHEN WILL I BE NOTIFIED OF THE RESULTS OF MY INFORMAL REVIEW REQUEST?

Homeowners will be notified of the results of their informal review in the annual Notice of Assessed Value which will be mailed at the end of July 2010.

Making a Formal Appeal

The next open formal appeal filing period for San Francisco will be July 2, 2010 to September 15, 2010 — to appeal the 2010/2011 assessed value of your property. A formal appeal can be made for multi-unit and commercial properties, as well as for houses, condos & cooperative units.
It is possible to attend assessment appeals board hearings for other people to see how they work. They are open to the public. These 3 online resources offer important details regarding the filing of a formal appeal:

1. SF Assessment Appeals Board: http://www.sfgov.org/site/assessment_index.asp

2. Publication 30: “Residential Property Assessment Appeals”: http://boe.ca.gov/proptaxes/pdf/pub30.pdf

3. Informational Videos on Property Tax Appeals: http://sanfrancisco.granicus.com/MediaPlayer.php?publish_id=458

Warning on Scams

There are a number of property-tax-appeal service companies, who have been sending out their solicitations on stationery that suggests a government agency affiliation. SF Assessor-Recorder Phil Ting has stated the following:

“We’ve received reports from dozens of taxpayers who have received a letter from companies offering to facilitate the property tax reassessment for $179 [or more]. This is unnecessary and deceptive. Taxpayers can fill out a simple, one-page application for a review of their property in my office, free of charge… There is no need to pay for this service.”
All information is from sources deemed reliable but subject to error and omission, and not warranted. Interested parties should contact the appropriate government agency to confirm all pertinent guidelines and procedures.

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