Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q: I'm looking to buy a property in San Francisco with a budget of $10 million. Are there differences in property taxes for a house versus a condo in the city?
A: Both a condo and a free-standing house will be subject to the same tax rate, said Roger Meredith, who has an eponymous law firm based in San Francisco.
The property tax is based on the purchase price of the home, according to Mr. Meredith.
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"That’s a state law, not a local one," he said.
The property tax rate in San Francisco is about 1.17%, according to the city treasurer’s office. Taxes are capped at 2% in California because of the state’s tax laws, Mr. Meredith added.
The only slight difference involves the common areas of a condo building, said Cameron Hess, a partner with Wagner Kirkman Blaine Klomparens & Youmans, a California law firm.
"An assessor may assess those spaces separately," he said. "Those taxes would be paid through the homeowner’s association."
And because those taxes are absorbed into the association fees, they are not tax deductible, he said.
A high-end building with a lot of amenities is likely to have high homeowner’s association dues, but they can’t be part of one’s itemized deductions of state-and-local taxes.
More:Click to Read Tax Experts Share Answers and Advice for Readers’ Pressing Tax Questions
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