With the booming arts scene and breathtaking scenery, it is no wonder why the value of condos in San Francisco rivals with the ones in the Big Apple. Thanks to its proximity to some of the best tech companies in the country, the city has also become a hotspot for career-driven millennials looking for a home away from home.
Getting a new property in this vibrant city can be exciting. While it’s all fine and dandy, you also need to take into account all the additional fees that come with your purchase–closing costs, utility expenses, and most especially, property tax.
What is Property Tax?
Property taxes are charges collected by local government units on all sorts of property including land, buildings, and machinery. It is paid yearly by owners or administrators.
Where Do Pay Property Taxes Go?
A huge portion of the money collected from taxes is used to provide public services in the community. It goes to the maintenance of roads, recreational parks, and school districts. It is also used to fund your local police, emergency paramedics, and fire departments.
Who Foots the Bill?
Anyone who owns a property has the civic duty to pay their taxes. Whether it is a condominium, a townhouse, or a property you inherited from your parents, you are required to pay taxes on those.
Factors to Consider When Calculating Property Taxes for Condos in San Francisco
Your local government hires tax assessors to calculate your property tax so you won’t have to do it yourself. However, it pays to understand how your property is assessed to make sure you are not overcharged. You may do this by identifying the factors that affect the numbers:
Tax Rate of Your State
Every state in the United States has a set of property tax codes owners should abide by. Depending on where you live, paying taxes can be just an added cost or a major financial expense.
In the city and county of San Francisco, the current property rate is at 1.1801%. To compute your property rate, simply multiply this by your property’s assessed value.
Type of Your Property
What your property is used for will greatly affect the amount of tax you are due. For instance, commercial spaces will have higher assessed value than residential condos which ultimately brings your taxes to the roof.
Location of Your Property
Residential communities in the San Francisco Bay Area have high property taxes not because of the state’s tax rate but because of its prime location. Aside from being a career hub, the city is also a home for top-notch public high schools and community learning centers parents can send their kids to.
How Property Tax for Condos in San Francisco is Calculated
Paying property taxes of condos in San Francisco is not cheap. The best way to handle them is by planning and learning how to calculate how much you owe every year. It’s simple: multiply the assessed value of your home by the mill levy to determine your tax amount.
Mill Levy
Essentially, mill levy or mill rate is your local government’s current tax rate. Your tax assessor should be able to help you with this information.
Assessed Value
Your condominium’s home value is pre-determined by a local tax authority who then inspects the acreage and/or square footage of your condominium. To compute your property’s assessed value, they factor in the amenities available in your community and similar homes nearby—the more amenities, the higher your value will be.
Note that it is important to reassess your taxes regularly. For instance, if you decided to upgrade your kitchen or turn your one-bedroom space into a loft, the value of your property will likely go up, which in turn could raise the value of your property.
Condo Property Tax vs Townhouse Property Tax
Taxes for condos and townhouses are calculated the same way. On average, both properties occupy less space so you can also expect lower property taxes compared to a typical single-family home. However, in a condo living situation, many owners will pitch in to pay for the tax due for the common areas while the owner of the townhouse is solely responsible for paying the property and land where it is built on.
Speak with a Trusted Real Estate Agent
If you are looking for Bay Area condos for sale, you may want to work with someone who has an in-depth knowledge about the local tax rates in the area. Paul Kitchen is an experienced real estate professional who knows the ins and outs of the industry and can help you throughout the process. Schedule an appointment with Team Hatvany at 415.345.3022 or email at team(at)teamhatvany(dotted)com to find out what your options are in real estate.