Homeowner Exemption, Prop 13 and Prop 19 for SF Owners

File the homeowner exemption, and do it before February 15. It knocks $7,000 off your assessed value every year for as long as you live in the home, which at San Francisco's current rate is roughly $80 a year, small enough to ignore and permanent enough that ignoring it is a mistake. Then understand the two rules that govern the rest of your tax life here: Prop 13, which caps growth in your assessed value at 2% a year from the price you paid, and Prop 19, which decides whether you can take that low value with you when you move and whether your children can inherit it.

Claim the $7,000 exemption

California exempts the first $7,000 of assessed value on a home you own and occupy as your principal residence on January 1. The Assessor mails a claim form, BOE-266, to new owners after a deed records; it is also on the Assessor's site. There is no income test and no fee.

• Deadline. File by February 15 for the full exemption for the fiscal year that starts the following July 1. File between February 16 and December 10 and you receive 80% of the exemption for that year, then the full amount after.
• Supplemental bills. The exemption can also apply to the supplemental assessment from your purchase if you claim it promptly after the notice arrives; the notice states the window.
• It renews itself. Once granted, the exemption stays on the parcel until you tell the Assessor you no longer qualify. You must do that if you move out or rent the home; there are penalties for leaving an exemption in place improperly.
• One per household. You cannot claim it on two homes, and you cannot stack it with the disabled veterans' exemption on the same property.

How Prop 13 sets your base-year value

Prop 13, passed in 1978, fixes the general tax rate at 1% of assessed value plus whatever voter-approved debt your parcel carries, which is why SF's combined rate is 1.18% rather than 1%. More importantly for a new owner, it defines what "assessed value" means.

When a home changes ownership, the Assessor sets a new base-year value at market value, which in an open-market sale is your purchase price. Each year after, the factored base-year value rises by the California inflation index or 2%, whichever is lower. That is the whole machine:

Your assessed value cannot outrun this table unless you trigger a reassessment. If SF prices double over that period, a neighbor who buys in year 20 pays roughly twice your bill for the same house, which is why moving within the city is more expensive than it looks.

What triggers reassessment, and what does not

Two points trip up SF owners. First, "new construction" is assessed at the value it adds, not by reassessing the whole house; a $150,000 addition adds roughly $150,000 to the roll and the rest keeps its factored base. Second, a substantial renovation that leaves a building "substantially equivalent to new" can be treated as new construction in full, which is why gut remodels of Victorians sometimes come with a bigger tax bill than owners expect.

Prop 19 base-year transfers: taking your value with you

Since April 1, 2021, an owner who is 55 or older, severely and permanently disabled, or the victim of a wildfire or governor-declared disaster can transfer the factored base-year value of a primary residence to a replacement primary residence anywhere in California, of any price, if the replacement is bought within two years of the sale. Owners in the age and disability categories may do this up to three times; disaster victims are not limited to three.

If the replacement costs more than the original sold for, the excess is added:

• Sell the SF home for $2,000,000 with a factored base-year value of $900,000.
• Buy a replacement for $2,300,000.
• New assessed value: $900,000 plus the $300,000 difference, or $1,200,000, instead of $2,300,000.

At a 1.18% rate that is roughly $13,000 a year, every year. File the claim (BOE-19-B, or the disability and disaster variants) with the Assessor of the county you move to; the BOE's Prop 19 page lists the forms and deadlines.

Prop 19 and inherited homes: the narrowed exclusion

Before February 16, 2021, parents could pass a primary residence of any value plus $1 million of other property to children without reassessment. Prop 19 replaced that with a much smaller exclusion:

• Only a family home (the parent's principal residence) or family farm qualifies.
• The child must make it their own principal residence and file for the homeowner exemption within one year of the transfer.
• The excluded amount is the parent's factored base-year value plus $1 million, adjusted for inflation every two years; the BOE set the figure at about $1.04 million for transfers from February 16, 2025 through February 15, 2027.
• If the home's market value exceeds the base-year value plus that amount, the excess is added to the new assessed value. For a parent's base of $400,000 and a market value of $2,000,000, the child's new base is about $955,000, not $400,000.
• Rental property, second homes and any home the child does not occupy are reassessed to full market value.

Talk to an estate attorney before relying on any pre-2021 advice.

Parcel taxes, bonds and senior exemptions

Your bill carries fixed-dollar lines that have nothing to do with Prop 13: school and community college parcel taxes, special assessments and voter-approved bonds. Several parcel taxes allow an exemption for owners 65 and older who live in the home, claimed from the taxing agency rather than the Assessor, usually by a late-spring deadline. As of 2026-10-24, check the current list and deadlines on the Treasurer and Tax Collector's property tax page and the back of your bill.

Reading your annual assessment notice

Each summer the Assessor mails a notice of assessed value for the fiscal year starting July 1. Check it against this list:

1. Land and improvements. The two should sum to your factored base-year value, up no more than 2% from last year unless you added construction.
2. Exemptions. The homeowner exemption should show as $7,000 off. If it is missing, file now; you will get 80% for this year.
3. New construction. If you pulled permits, a separate line shows the value added; compare it with what you actually spent.

The notice is not a bill; it is your warning of what the bill will be and the trigger for the September 15 appeal deadline.

When assessed value exceeds market value

Prop 13 limits how fast your value rises; it does not stop it from exceeding what the home is worth after a price decline. If you bought near a peak and the January 1 market value of comparable homes has dropped below your factored base-year value, state law (Prop 8) entitles you to be taxed on the lower figure for that year. In San Francisco the Assessor offers a free informal review each winter, and a formal appeal is available through the Assessment Appeals Board. Check recent closed sales against your assessed value in the comps tool, then read appealing your SF property assessment for deadlines and evidence. Mortgage interest and SALT after the 2025 tax law covers what the property tax you pay is worth on your return.