San Francisco is undoubtedly one of the most beautiful and livable cities in the United States. With its beauty and its robust economy it boasts some of the highest real estate values in the county. San Francisco property tax rates are also amongst the highest in the country.
In 2019-2020, the taxable property assessed value in the Bay Area came in at $1.8 trillion!
San Francisco is ranked 52nd out of the 3,143 U.S. counties for the highest median home value property taxes.
The median property tax in San Francisco County, California is $4,311 per year. This is for a home at the median value of $785,200. San Francisco County residents pay a total rate of around 0.55% of their property’s assessed fair market value as current-year property tax.
How Property Taxes in California Work
When you buy a home in California, the assessed value of a property is equal to the purchase price. The assessed value of the home increases or decreases based on the rate of inflation. In California’s case it is based on the change in the Consumer Price Index. There is currently a 2% cap on the rate of increase.
California property taxes are governed by a State mandated law called Proposition 13 which was passed in fiscal year 1978 by California voters to limit property tax increases. Supplemental taxes are added on from county-to-county.
For those who have owned their homes for a long time, the assessed value will most likely be lower than the market value. This is how wealth is built with California real estate.
One can generally estimate a home’s property tax by multiplying the purchase price by 1.25%
What California Properties are Subject to the 1% Rate?
Although most real property in California is taxable, certain types are exempt from real property from taxation.
These are generally government properties or properties that are used for non–commercial purposes like hospitals, charities, religious properties, and nonprofit colleges and schools.
For California properties subject to the property tax, they fall into three area:
- Owner–occupied residential— These are properties that receive a homeowner. Exemption. This can be claimed on a primary residence.
- Investment and/or vacation residential. These are residential properties other than those used as a primary residence, including vacation homes, vacant residential land, multifamily apartments and rental condominiums and homes.
- Commercial—The are retail properties such farms, industrial plants, and other income–producing properties.
How San Francisco Property Tax Rates Work
San Francisco County property tax rates are based on a complicated formula to determine the property tax owed on your property. Unfortunately it is not as simple of a calculation to figure your property tax rate as it is with income or sales tax.
Since San Francisco is a combination of a city and county in one jurisdiction, the tax rate is a mix of traditional and add-on taxes.
The San Francisco Property Tax Rate for the City and County of San Francisco is set at the county level and is currently set at 1.1801%. This is based on the assessed value of the home for 2019-20.
How Does San Francisco Taxes Compare to other U.S. Cities?
Although San Francisco real estate and property are considered high, there are areas of the country with much higher value property tax rates. Here a few with higher rates than San Francisco:
- New York State: 3.50% (average)
- Milwaukee, WI: 3.68%
- Chicago, IL: 2.3%
- Bridgeport, CN: 2%
- New Jersey: 2.38% (average)
- The State of Texas: 1.9% (average)
- Nebraska: 1.84% (average0
Why are Property Taxes Important?
Property taxes are used to help finance local government services citizens use like law enforcement, city services, water and educational institutions such as the San Francisco unified school district.
In California, over 4,000 local governments receive revenue from Proposition 13’s 1% tax rate. Property tax collected from the 1% rate is distributed to counties, K-12 schools, cities and community colleges and special districts.
It is safe to say that property owners carry the brunt of the tax burden. Most residents do not enjoy receiving their new Property tax bills. However, annual property taxes, along with personal property taxes and various sales tax rates, are the lifeblood of keeping communities functioning and safe.
When you need help determining property taxes on the home you live in or want to buy, give us a call at Redmond Realty. We are experts at determining property values and tax and will be happy to help you navigate through San Francisco property tax rates and values.