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Navigating San Francisco Luxury Condominium Property Taxes

Sean Mamola  |  September 19, 2022

Understanding Property Taxes Before Purchasing Your San Francisco Luxury Condominium

San Francisco is home to the Bay Area's sweeping coastline, the majestic Golden Gate Bridge, the Painted Ladies, and an unparalleled high end luxury real estate market. If you’re interested in San Francisco luxury real estate, it is essential to understand the unique property taxes in the state. We always recommend that an individual seek the guidance of a certified professional CPA. Here is a quick overview of what to expect. 

San Francisco luxury condos range from the classic Victorian styles to the sleek, state of the art modern styles of Mission Bay, South Beach as well the sprawling refurbished luxury warehouse lofts of Dogpatch and SoMa. All condos, lofts and homes all subject to state property tax laws. 

Not everyone who moves to a luxury San Francisco High-Rise condo have been brought up to speed in regards to the state’s property tax regulations. For a flawless transition into the Bay Area lifestyle, read on for Sean Mamola’s property tax guide to purchasing a gorgeous luxury highrise condo in San Francisco.

What are the California laws regarding property taxes?


Throughout the years, the state of California has passed many iterations of state laws in regards to property taxes. The state laws on property taxes are constantly changing, however the most important one to prospective buyers would be Proposition 13. 

What is Proposition 13?


Proposition 13, according to the periodical First Tuesday, is short for "The People's Initiative to Limit Property Taxation.” The law was voted into California's Constitution in 1978 and has been upheld during subsequent Supreme Court rulings.

For those unfamiliar with California laws, the ballot originated as an initiative, which means it was put on the books by a majority of the public and voted into law. So, how does Proposition 13 (Prop 13) impact San Francisco luxury real estate?

  • Proposition 13 includes the codes surrounding property taxes each year.
  • When transacting in luxury markets, property taxes can include a sizable amount.
  • California law has kept the property tax level at 1% of the assessed value for the initial purchase.
  • According to Prop 13, the state cannot continue to increase property taxes at a level of more than 2% per year following that.
  • The reason Proposition 13 exists is in direct correlation to the fair market value of California properties has increased dramatically over the years.
  • Californians implemented Proposition 13 onto the ballot to combat excessive property taxes.
  • If you are interested in San Francisco luxury condos or other properties, you may benefit from Proposition 13. 

How Would Proposition 13 Impact My Tax Rates?


Photo courtesy of Unsplash

Many San Francisco high-rise apartments  are well over a million dollars, this calculates a significant portion returned to the community in the form of property tax. The 1% tax rate is also determined by the purchase price of the real estate, according to Mac Taylor's research about Prop 13 in Common Claims about Proposition 13. 

Based on Taylor's findings and the legal code, Proposition 13 was meant to cap taxes and reflect larger national movements by homeowners in order to limit the amount charged by the tax assessor. Property taxes are a significant source of revenue for any state. Still, many buying real estate can occasionally overlook this portion of the transaction and fail to anticipate this additional bill. 

When it comes to Proposition 13, keep in mind that this initiative was established by the residents of California. When California's market soared, and it became an idyllic mecca for homeowners, those who already owned homes saw their properties increase in value. However, many older residents, who did not elect to sell their homes at the time, could not anticipate the magnitude of the change in the market. They found that properties once worth about $70,000 were now valued in the millions. However, while these individuals could afford property taxes on a $70,000 home, many foresaw that the state would levy their property taxes at astronomical rates if there weren't a cap on the market. 

When Proposition 13 was passed in 1978, it signaled a win for homeowners and remains so to this day. While other states have levied taxes at rates higher than 1% for the wealthiest property owners, 1% of potential property taxes for landowners in California was significantly less. Additionally, homeowners were not targeted with additional real estate taxes specific to their property value and could retain more assets. While other states have passed measures affecting real  estate-specific property tax increases, California has not done this and has kept it at 1%.

Other states charge much more than the initial 1% tax and 2% option in some areas, so those new to luxury High Rise real estate in San Francisco, should see it as a potential benefit. It might be a significant amount to pay, but it could be higher, and many individuals have saved money for decades based on the rate. 

How does Proposition 13 benefit current California residents?


Photo courtesy of Unsplash

Aside from the fact that many homeowners have saved on taxes over the years, there are several perks for existing residents. For those already in California, it is possible to transfer an existing property tax rate to a new property once during their lifetime. This translates to the following: If you currently own a property and are 55 or older, it is possible to transfer your current rate under certain circumstances. For older Californians, this means the possibility to move to properties that have also been impacted by the real estate markets' tremendous upticks without facing the higher rates that new property owners pay exists. Proposition 13 has a noticeable impact on luxury property taxes, by introducing the practice of capping taxes. When considering luxury properties and utilizing our bill estimation tool, it's important to keep Proposition 13 in mind. 

For and in depth outline of  Statewide property tax guidelines, always consult a professional licensed CPA.

Ready to get started?


If you are ready to see all that San Francisco has to offer, contact Rises.co today. The professionals at Rises.co are highly skilled in luxury real estate transactions, and have an impressive portfolio of successful sales.

*Header photo courtesy of Pexels



Sean Mamola

Sean Mamola

Rises.co Sales Associate

Global Luxury Specialist & Penthouse Expert

Sean Mamola is a San Francisco real estate agent who specializes in luxury properties and penthouses throughout the city's most coveted neighborhoods. As a Global Luxury Specialist with Compass and Rises.co, Sean works with discerning clients who are buying and selling exceptional properties in San Francisco. Since 2018 he has closed 75+ transactions and more than $100M in sales volume across the city's high-rise condo and penthouse market.

Neighborhood Expertise

Sean focuses on San Francisco's premier areas including South Beach, Yerba Buena, Mission Bay, Pacific Heights, Lower Pacific Heights, Russian Hill, and Nob Hill. His deep knowledge of these neighborhoods allows him to guide clients to properties that perfectly match their lifestyle and investment goals.

Whether you're drawn to the modern luxury of South Beach condos, the urban sophistication of Yerba Buena, the waterfront appeal of Mission Bay, the timeless elegance of Pacific Heights, the historic charm of Russian Hill, or the prestigious heights of Nob Hill, Sean understands what makes each area unique.

Luxury Real Estate Services

For Sellers
Sean creates comprehensive marketing strategies that attract qualified buyers with refined tastes. He believes in elegant staging with meticulous attention to detail, ensuring your property makes an unforgettable impression. His marketing reaches both international and local luxury markets, maximizing exposure for condos, penthouses, condotels, and new developments.

For Buyers
Using cutting-edge technology and market research, Sean carefully analyzes pricing and property trends to find homes that satisfy his clients' specific preferences, price points, and lifestyles. His 24/7 availability and white-glove service ensure you never miss the right opportunity.

The Sean Mamola Advantage

Working with Sean and his partnership with Rises.co gives clients significant competitive advantages. His vast network of interconnected agents results in winning offers and an impressively low ratio of properties shown to offers accepted. Sean's impeccable work ethic and precise negotiation skills ensure sellers find the right buyer and buyers secure their dream home.

Background & Approach

Before becoming a licensed real estate agent, Sean spent years in luxury hospitality, skills he applies to every client relationship and transaction. He has tremendous respect for people's privacy and consistently exceeds expectations – from international travel to execute transactions to handling unique special requests.

As a Bay Area native who lived in New York City for 15 years, Sean brings a global perspective and genuine appreciation for people from all walks of life. His diverse background helps him connect with clients whether they're local San Francisco residents or international buyers seeking their perfect property.

Personal Touch

When not working, Sean enjoys cycling, spending time with his large Irish-Italian family, and volunteering for Food Runners, The Richmond/Ermet Aid Foundation (REAF), and Broadway Cares/Equity Fights AIDS. This community involvement reflects his commitment to giving back to the city he serves.

Ready to Work Together?

If you're looking for an exceptional San Francisco real estate agent who specializes in luxury properties and provides truly high-touch service, let's talk. Sean is ready to help you find your perfect San Francisco home or achieve the best possible outcome when selling your property.

Specializing in luxury condos, penthouses, and exceptional properties in South Beach, Yerba Buena, Mission Bay, Pacific Heights, Lower Pacific Heights, Russian Hill, and Nob Hill.

 

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Contact Details

CONTACT SEAN MAMOLA AT RISES.CO

EMAIL US

(415) 704-3640

CA DRE# 02056250

 

891 Beach St.,
San Francisco CA 94109

 

SAN FRANCISCO REAL ESTATE