Know How: Phil Ting’s Property Tax Tips
Assessor talks with Vanguard and offers his perspective
Phil Ting, San Francisco Assessor and mayoral candidate, reported his office granted nearly 18,000 tax assessment appeals last year during his visit to Vanguard Properties recently. Next year, the process is slated to go fully online, he said, eliminating the need to print and mail appeals, thus freeing his staff up to conduct regular business.
This deluge, he said, diverted eighty percent of his office’s time away from typical business like calculating dreaded Supplemental Tax Bills for example. A property’s assessed tax value is based upon ‘fair market value’ — typically your transaction’s sale price and is to be paid twice a year.
And the ‘Supplemental’ refers to the upwardly revised property tax statement new owners receive well after their purchase in addition to the regular annual tax bill. But getting the Supplemental can take anywhere from 2 to 4 years from the actual sale – so if your lender or HOA doesn’t require a set-aside, bank this money away as taxes usually increase. Ting’s office will base their new assessment on the sale price for most transactions unless the sale price varies from what the office deems to be “fair market value.”
Some wrinkles to consider: the Assessor’s office has no access to MLS data and may not use the sale price for a REO or short sale deal and will instead calculate its own figure. Moreover, in its general assessment calculations, if his office is prompted to determine fair market value, Ting said that his staff omit REO and short sales data when valuing a property’s liability. Some useful tips Ting offered:
- Reassessment based on remodeling: Adding more square footage will lead to a reassessment; remodeling kitchens and bathrooms typically don’t. Barring a tax inspector access to inspect any new work, however, will lead the office to use a higher-priced presumption in their assessment.
- Owners joining an existing TIC should request a separate assessment from the Assessor. Ting’s office has no way to evaluate individual homes within the larger building because the overall property will still only have 1 parcel number. Requesting a separate assessment and/or submitting an appraisal may aid the process to ensure better accuracy.
- Ting encouraged homeowners apply for the tax assessment discount of $7000, which yields an average of $80 in annual savings.
- Short sales and REO homes will be assessed using the most recent tax record assessments before any financial distress took place as Ting’s office will favor fair market value over the sales price method. In other words, the Supplemental will be higher than the sales price for a short sale/REO property buyer.