The FORMAL APPEAL PROCESS FORM: The next open filing period for the City and County of San Francisco will be July 2, 2009 to September 15, 2009 to file a formal appeal for the 2009/2010 assessed value of your property. To timely file a formal property appeal for the 2009/2010 tax year, a completed Application for Changed Assessment form must be submitted or postmarked to the Assessment Appeals Board no later than September 15, 2009, regardless of whether or not you have requested an Informal Review of your property through the Assessor’s office. This is a simple one page form and can save you thousands of dollars if you are successful with your property tax appeal. For more information or to obtain comparable sales, please contact me and I will provide you this information at no charge.
http://www.veoh.com/videos/object%20width=410%20height=341%20data=http://www.veoh.com/veohplayer.swf?videoAutoPlay=0&permalinkId=v18536404anHCEEE8&id=17224488&player=videodetailsembedded%20type=application/x-shockwave-flashparam%20name=bgcolor%20value=#FFFFFF%20/param%20name=src%20value=http://www.veoh.com/veohplayer.swf?videoAutoPlay=0&permalinkId=v18536404anHCEEE8&id=17224488&player=videodetailsembedded%20/param%20name=allowfullscreen%20value=true%20//objectbr%20/span%20style=font-size:%20xx-small;Watch%20a%20href=http://www.veoh.com/videos/v18536404anHCEEE8Property%20Tax%20Appeals%20Process/a%20in%20a%20href=http://www.veoh.com/browse/videos.html?category=category_newsNews%20Online/a%20|%20View%20More%20a%20href=http://www.veoh.com/Free%20Videos%20Online%20at%20Veoh.com/a/spanFortunately, San Francisco property values have held steadier than most cities, but there are distressed sales that can be used to lower your tax basis saving you hundreds or thousands of dollars every year.
It may also be prudent to start the formal appeal process as well as filing the quick online property tax appeal forms on the links listed below.
Questions and more options about the propery tax appeals process:
Do I have any recourse if I disagree with the valuation placed on my property by the Assessor?
Yes. If you disagree with the assessed value of your property you may contact the Office of the Assessor/Recorder at (415) 554-5596. They can provide you with information on how the value was established.
If you still disagree with the assessed value of your property after reviewing it with the Office of the Assessor/Recorder, you may contact the Assessment Appeals Board for the purpose of appealing your assessment.
If you choose to appeal your assessment, you must still pay your property tax in full by the appropriate deadlines; otherwise, you will incur penalties while the case is on appeal. If your appeal is granted, a refund will be issued to you.
Appeal applications and further information about the appeal process can be obtained by contacting the Assessment Appeals Board. Please call if you have any questions. I can also provide you with recent sales to support value changes in your area.
The 11-2-2008 SF Chronicle real estate section has some good information on Capital Gains Tax and the Principal residence exemption as applies to the new regulations.
How to calculate the Cost basis?
Two Year ownership requirement?
Time limits – Holding period for the house to qualify for the exemption?
Do Vacation Homes qualify?
Q: Can you please define “capital gain”? You mentioned the term in one of your previous articles, but I did not quite understand how it would benefit me. My husband passed away five years ago and I am ready to sell our home and downsize to a smaller one. The house is 30 years old and the mortgage was paid off two years ago. I would appreciate any information you could give me on the subject.
A: Capital gain is the profit you have made on your house. You take your original purchase price, add to it the cost of any improvements you may have made, and you add certain expenses that you paid when you first went to closing. These expenses can be found in IRS Publication 523, Selling Your Home. This is called the “tax basis” of your house.
Then you take the selling price of your house and deduct any real estate commission you may have paid, as well as other expenses such as advertising, legal fees associated solely with the selling of the house, and any loan charges you may have paid for your buyer. This is the adjusted selling cost. To get your gain you subtract your tax basis from the adjusted selling cost.
This is a very oversimplified explanation. I have not discussed your situation about where your husband died because you will get a stepped-up basis that will differ depending on where you live.
Furthermore, I have not discussed the up-to-$500,000 exclusion of gain (up to $250,000 in your case because you cannot file a joint tax return) that you can take if you have owned and used the house for two out of the five years prior to its sale.
You should carefully review the IRS publication, and if you still have specific questions, talk with your own tax and legal advisers.
Q: I want to buy my brother’s home (essentially for the amount of the mortgage), which I would allow my brother to continue to live in, and which I would use as a second (vacation) home. When my brother leaves the house (death, nursing home, etc.), I plan to sell the house and use the IRS $250,000 capital gain exclusion (assuming at least two years of ownership). Are there any potential problems with this plan? Would it be wise to place the house in a trust?
A: You have to talk with your attorney as to whether to put the house in trust. There are many variables, which are individual and possibly unique to your situation, so I don’t believe it would be appropriate to give you advice on this issue.
I see no real problems with your proposed plan. However, you should know that the new Housing and Economic Recovery Act of 2008, signed into law by President Bush on July 30, 2008, puts some restrictions on your ability to claim the full $250,000 exclusion of gain.
This is complicated, but suffice it to say, if you sell a second home (whether it be a rental property, a vacation home or the type you are describing) the exclusion will be allocated between the time you owned the property and the time that you actually lived in it. In simple terms, the period of time you used the property as your principal residence will be eligible for the gain exclusion; the time that it was not your principal residence may be taxed.
Q: My wife and I are considering renting our current primary residence for a short time after we build a new house with the idea of letting the housing market stabilize before we sell our current home. What are the tax rules regarding renting a primary residence and still counting it as a primary residence when sold?
A: In order to be eligible for the up-to-$500,000 exclusion of gain ($250,000 if you are single or do not file a joint tax return), you have to own and use (live in) the property for two out of the previous five years before the house is sold. In your example, if you already have owned and lived in the house for at least two years, you can rent it out for one day less than three more years.
Be careful, however. If you rent out your house, will potential buyers be interested in buying when there are tenants? Will you be able to get the tenants out of the property in time to sell before the three years are up? Perhaps an investor can be found to buy and let the tenants stay in the house, but you cannot count on finding such a buyer.
If you decide to rent, my suggestion is to make sure that the lease completely expires in two years. This will give you one full year in which to find a buyer. Otherwise, you will have to pay capital gains tax on any profit you make, unless you either hang on to the house as a long-term investment or do a 1031 (Starker) exchange.
Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to firstname.lastname@example.org.
This article appeared on page L – 1 of the San Francisco Chronicle 11-2-2008
With declining real estate market values in many areas, it may be time to review your property tax basis. So far, in 2008, there have been 810 property owners who have had their taxes lowered by the City Assessor-Recorder’s office. If you believe the property values in your neighborhood have declined since you purchased your home, you might want to appeal the tax assessor’s valuation of your property with the County Tax Assessor.
This map shows the actual areas with the percentages where these tax reductions for the 810 property owners in San Francisco took place. Notice that the majority of the assessment adjustments were in Area 9 (South of Market and the Inner Mission District). These adjustments would be mostly attributed to the devaluations on the lofts and newer construction condos more than single family homes. In Area 10 (Bay View, Silver Terrace, Outer Mission, Excelsior, Portola) the values have dropped as a higher percentage of homeowners purchased homes with subprime loans and the resulting foreclosures have had a negative impact on the market.
The Appeals Process
There is a formal and informal property tax appeal process in California. The informal process involves filing with the County Assessor while the formal process involving filing an appeal with the Assessment Appeals Board where you can choose to have a Hearing for an independent review of your property’s assessed value. An appeal will need to include recent comparable sales in your area and other pertinent data.
Please note: There are many web sites that will assist you with this process for about a $30 fee. However, be careful. Computer generated comparables from Zillow.com and other sales data bases do not always accurately reflect positive and negative individual property value adjustments and the resulting property valuations can vary greatly. Median property values on single family homes have declined approximately 6% overall in San Francisco from October 2006 to October 2008. However, the individual districts and neighborhoods adjustments require personalized market expertise to accurately assess the comparables.
If either spouse is over age 55 (when the old home is sold), PROP 60 allows replacement of a primary residence with a new home of equal or lesser value (but see below) within the same county and transfer of the Prop 13 assessed valuation from the old home to the new property. This is allowed once in your lifetime, and a spouse who has done it before ‘taints’ both spouses. For example, you can sell your $1,000,000 San Francisco home [assessed value $80,000] and move to another home or condo in for under $1,000,000 purchase price within San Francisco and your assessed value will remain at the $80,000 assessment level!
In past times, many counties allowed for Prop 60 property tax transfers from one county to another county. However, due to to the scarcity of tax dollars, most counties no longer cooperate with Prop 60 transfers from other counties. San Francisco only allows for Prop 60 transfers for residents within San Francisco county.