How is property tax appraised in California? Does it depend on the home purchase price?

Question

I am considering an option between a lower home purchase price versus a "cash-back" from the selling agent. This is for a home in San Francisco, CA.

Since this seems to be triggering some warnings, just want to clarify that the seller's agent has offered to reduce the home purchase price if I sign him on as a buyer's agent. On the other hand, I get "cash back" from online brokers like Redfin, ZipRealty.

Answer 1

No, the purchase price does not affect the taxed amount. What the tax appraiser deems is the amount times the city, county, and state millage rates. The best way to research what the taxed amount would be to contact your county appraisers office by either phone or the web and look up the last years property taxes in your neighborhood or zip code. Actually your agent should be able to look it up for you.
As for the "kickback" from the selling agent, it is highly illegal in any state as it violates RESPA laws and is required to be officially stated in your HUD1 settlement statement. Furthermore it is considered to be a taxable gain that you would be responsible for reporting as income. Your best bet would be to spend $150 and have a real estate attorney review any documents before you sign. Good luck!
On a side note with something that just occured to me, keep in mind that if this any type of new construction that you will be billed the first year as "unimproved property" which will differ quite a bit from what you will be taxed the next year.

Answer 2

In California it is based on Prop 13 and often its based on aproximately 1% of the sales price. In California one does recieve a homeowners exemption and perhaps someone else can shed the specfic amount $6,000 or $7,000.?

The local assessor will also send out a new tax bill for the difference.

Cash Back from the selling agent? This may be a "Red Flag" check with the agents Broker or the Dept of Real Estate.

Answer 3

Yes, the rule of thumb is 1.25%, but there are many districts where higher taxes have been enacted by bonds. This leads to the rule of thumb most often applied: take three zeroes off the purchase price, and that's your monthly tax set-aside.

Cash back from the selling agent can be (usually is) Fraud. if the lender discovers it, it's bad news

Answer 4

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