Tuesday, March 10, 2015

New practice of S.F. tax assessor requesting extensive info

A new practice of assessing the property tax gains speed in San Francisco. No longer it is enough to report your sale's price to establish the new value. Instead, new owners now receive a letter like this from the San Francisco Tax Assessor Office. It asks the new buyer about a lot of additional information, even some that buyer may not even know, such as future rent values. What a buyer to do?

First, there are legal grounds for the City to demand this information. To familiarize yourself, read this document from page 27 to 34. Pages 30-32 contain exceptions. Applicable law includes Cal. Const., Articles XIII, XIII A, and XIII B, California Revenue and Taxation Code §§ 441 et seq.,  18 Cal. Code Reg. §§ 1–1051. There are penalties for failure to provide property statements and requested information [Rev. & Tax. Code §§ 441(b), 463, 506, 531]. There are also provisions allowing to amend the statement without penalty [see Rev. & Tax. Code § 441 (i), (j)]. 

Second, consider what parts of the requested information are privileged. For instant, lease agreement contain information, which might be protected by buyer's own and third parties/tenants' privacy right to keep their personal and financial information confidential. Cal. Const., art. I, § 1.  The scope of what is considered personal information is defined in Cal. Civ. Code 1798.3(a). The right to privacy applies both to governmental and private conduct. Hill v. National Collegiate Athletic Assn., 7 Cal.4th 1, 20 (1994). It can be asserted on behalf of third parties/employees by an employer [Hill v. Eddie Bauer242 F.R.D 556 (CD Cal., 2007); Life Techs. Corp. v. Sup. Ct., 197 Cal.App.4th 640 (2011)], and on behalf of tenants by a landlord. Dpt. of Fair Employment & Housing v. Sup. Ct., 99 Cal.App.4th 896, 905 (2002) [a case holding that the government needs a compelling state interest to prevail over the privacy protection], see also Munoz v. MacMillan, 195 Cal.App.4th 648, 662 (2011). On the other hand, assessor's rights to demand this information are quite broad. Roberts v. Gulf Oil Corp., 147 Cal.App.3d 770, 780–783 (1983). These include a right to ask for an expected or future income from the already purchased property, but not from the future acquisitions. Union Pac. R.R. Co. v. State Bd. of Equalization, 49 Cal.3d 138, 149 (1989).

If the owner would like to assert own financial privacy and on behalf of the third parties, the owner shall know that the collected information may be and supposed to be kept secret. But, it still gets sometimes revealed to the public, as it had happened in this case, where the appraiser's notes and calculations were demanded under the Sunshine Ordinance. This case (Complaint No. 11051, Urban Forest Coalition v. Assessor, et al.) shall serve as a cautionary tale for anyone disclosing private information to the municipal government, especially under the subject Revenue and Taxation Code.

Third, aside from the privacy concerns, exemptions exist in the codes.  California Constitution provides for exemption of some property  [Cal. Const., art. XIII, §§ 3, 4]. There are statutory exemptions under the Rev. & Tax. Code § 201 et seq. Property tax may also be postponed for those who are over 62 y.o., blind, or disabled. Rev. & Tax. Code § 20501 et seq.  For every scenario, the owner claiming a right for exemption has the burden of proving it. Sterigenics Int'l v. County of Orange, 47 Cal.App.4th 1541 (1996).


Property tax is exempt either based on the property type or on the status of the holder of that property. For claiming an exemption as a holder, an affidavit will be required, as it is in the Cal. Rev. & Tax. Code §§ 252, 253.5, 254.5. For claiming an exemption based on the property itself no affidavit is generally required, yet the form sent to the appraiser itself may be deemed an affidavit.


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For a new property owner it is easy to become overwhelmed with what is required of you by all levels and kinds of government authorities. Your options and available strategies will depend on your case's particular facts. If you want to learn on your options, rights, and obligations in a similar situation, make your first step toward taking control over the circumstances, and call my office at (415) 987-7000. I will be glad to assist in guiding you through the jungle. The only thing you can't afford is to stay put and uninformed. My office provides a confidential assessment of your particular scenario, free of charge, and I will share with you the results of the analysis along with my thoughts on available solutions.

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