Obtaining A Tax Certificate For Condominium Conversion
Answers to the most commonly asked questions about property tax and condominium conversion
California law requires that an owner who is converting his/her property to condominiums pay property taxes on that property before recording the subdivision map. Taxes must be paid for the fiscal year in which the map is recorded (which runs July 1-June 30) and, in some cases, for the following fiscal year. Depending on the time of year the map is recorded, this can sometimes mean paying property tax more than a year before it is ordinarily due. This article explains how to determine the required property tax payment, what documentation of payment is necessary to complete condominium conversion, where to get this documentation, and where to bring it once it is obtained so that the subdivision map can be recorded. It also answers the most commonly asked questions about property tax requirements and condominium conversion.
What property taxes must be paid in advance to complete a condo conversion?
In order to determine the amount of property tax that must be paid to complete a condominium conversion, it is necessary to understand how and when property taxes are ordinarily billed and paid. Property tax is assessed based upon fiscal years that run from July 1 until June 30. Ordinarily, the tax bill is mailed in October and the tax is payable in two equal installments, with the first due in November and the second due in March. If there has been a property tax increase from a sale or other event, the resulting bill can be mailed any time of year and the payment date will depend on when the bill is mailed.
The property tax payment required to complete conversion depends on the time of year that the converting owner submits his/her subdivision map for recordation. Recording the map is the second-to-last step in the conversion process, and can occur only after the owner has completed all required building repairs and the City has approved the condominium conversion application. The owner triggers the map recording process by formally submitting the subdivision map to the Department of Public Works (“DPW”) for recordation. Here is how the timing of this submittal determines the amount of property tax the owner must pay:
- January 1-June 30: If the subdivision map is recorded between January 1 and June 30, the converting owner must pay all property tax due for the current fiscal year (which runs through June 30), plus all property tax due for the next fiscal year (which begins the next July 1 and runs until the June 30 of the following calendar year). Assuming the bill due the prior November was paid, the owner must pay in advance the installments that would ordinarily have been due in March, November, and the following March.
- July 1- December 31: If the subdivision map is recorded between July 1 and December 31, the converting owner need only pay the property tax due for the current fiscal year (which runs through June 30 of the following calendar year). Assuming the bill due the prior March was paid, the owner must pay in advance the installments that would ordinarily have been due in November and the following March.
Can an owner lower the amount of prepaid property tax by delaying completion of his/her condominium conversion?
An owner wishing to lower the amount of property tax prepayment required, or to postpone payment until he/she can afford it, can delay recording of his/her subdivision map. In general, the maximum delay period is 24 months from map approval, but this period can be extended upon request. If the map is not recorded within the required time frame, it expires, in which case the property must re-qualify for condominium conversion and submit a new application.
How can an owner determine the exact amount of property tax he/she must pay?
To determine the exact amount of required tax payment, contact the Office of the Treasurer and Tax Collector at (415) 554-4400, or send an email to [email protected]. The person requesting the amount needs to know the lot and block number of the property being converted.
How and where does the owner make the required property tax payment?
The most reliable and least expensive way to pay the required tax is to do so in person at City Hall Room 140 weekdays between 9 AM and 5 PM. This is also the only way to pay any tax for which a bill has not yet been issued. If an owner is submitting his/her subdivision map between January 1 and mid-October, it will be necessary to pay tax in person because at least some of the payment will be for taxes not yet billed.
Property tax for which bills have been issued can also be paid as follows: (i) by mail to City and County Tax Collector Real Estate Tax P.O. Box 7426, San Francisco, CA 94120-7426; (ii) by phone at 1-800-890-1950 (using a credit or debit card); and (iii) online at www.sftreasurer.org (using a credit or debit card). Telephone and online payments are subject to additional fees and processing delays.
What is a Tax Certificate?
A Tax Certificate is a document issued by the Tax Collector certifying that required property tax payments have been made. An owner converting his/her property to condominiums must request a Tax Certificate immediately before he/she submits the subdivision map for recordation.
How does one obtain a Tax Certificate?
Here are step-by-step instructions for getting a Tax Certificate:
- Step 1: Go to the counter at City Hall Room 110 and explain that you need a Tax Certificate, identifying the property by lot and block number. You will receive a statement of any taxes you must pay along with a separate bill for the $40 Tax Certificate fee. Before leaving the counter, confirm that the Tax Certificate bill correctly shows your name, phone number, email address, block and lot number, and property address. Note that if you have recently made a tax payment by mail, phone, or online, the statement of taxes payable may not reflect these payments due to processing delays.
- Step 2: Go to the window at City Hall Room 140 to make the required payments. You may pay by personal or cashiers check. Credit cards are not accepted in Room 140. Be sure to get receipts.
- Step 3: Return to the counter at City Hall Room 110 where they will take a copy of the receipt. The Tax Collector will email the Tax Certificate to DPW, and email a copy to you.
Can someone other than the property owner obtain the Tax Certificate?
Someone other than the property owner can pay the tax and obtain the Tax Certificate.
What happens if a tax prepayment turns out to be higher or lower than the tax bill?
When property taxes are paid before the final tax bill is issued, the amount payable is based on the Tax Collector’s estimate. If the estimate is too low, the payment and remaining balance owed will be shown on the tax bill, and the unpaid amount will be due the following March. If the estimate is too high, the Tax Collector will issue a refund automatically.About the authorSirkinLaw APC has been guiding clients through San Francisco condominium conversions for almost 20 years, and have completed more SF conversions than any other firm. Over the years, we have been involved in drafting many of the laws that govern SF condominium conversions, and have helped develop many of the procedures used by the San Francisco Department of Public Works (“DPW”) Bureau of Street Use and Mapping (“BSM”). Our breadth of experience makes it likely that if a glitch appears in the condominium conversion process, we will have seen something similar before and know exactly what to do. And for those rare occasions when a completely new issue arises, we are the recognized masters at developing creative solutions that save our clients time and money.
About the Author
SirkinLaw APC has been guiding clients through San Francisco condominium conversions and subdivisions for more than 30 years, and have completed more SF conversions than any other firm. Over the years, we have been involved in drafting many of the laws that govern SF condominium conversions, and have helped develop many of the procedures used by the San Francisco Department of Public Works (“DPW”) Bureau of Street Use and Mapping (“BSM”). Our breadth of experience makes it likely that if a glitch appears in the condominium conversion process, we will have seen something similar before and know exactly what to do. And for those rare occasions when a completely new issue arises, we are the recognized masters at developing creative solutions that save our clients time and money.
Experience has taught us that the most important things to our clients are the immediate availability of staff to answer client questions and diligence in following the process of governmental approval. To ensure we achieve these goals, we have a full-time team devoted to client contact, preparation of subdivision applications, and monitoring subdivision approvals. Our team maintains a direct-access telephone line and can be reached easily any weekday to discuss the status of a conversion or subdivision process. And for those occasions when you need to speak with an attorney, Rosemarie MacGuinness is committed to being available to you when you call or within the next 24 hours. Rosemarie is known for her diligence in calling clients back quickly, and is more committed than ever to being easily reached.
But while processing the condominium conversion or subdivision quickly and efficiently may be our client’s most immediate priority, the governing documents (the Declaration of Covenants, Conditions and Restrictions, or “CC&Rs” supplemented in some cases by Bylaws and/or Articles) will have much greater long-term impact. The quality of the governing documents will directly affect the quality of life of the owners, as well as their ability to refinance and sell. Andy Sirkin was co-author of 10 editions of The Condominium Bluebook, and his expertise in preparing condominium governing documents is recognized throughout California. SirkinLaw APC governing documents continue to be the ones other firms emulate, and Realtors, lenders and buyers strongly prefer. This leadership results from constant improvement and innovation that makes our documents easier to read and understand, as well as more efficient and less expensive to enforce.
Before you choose a lawyer to handle you condo conversion or new construction subdivision, take a moment to speak with Andy or Rosemarie at SirkinLaw APC. Our practice includes all required City and State applications and filings, as well as preparation of any governing documents you may need. We offer these services on a flat-fee basis, and our rates are generally lower than those of other firms. Contact us via our contact form.