Hi, my name is Carmen Chu, San Francisco’s elected Assessor. One of our office’s core responsibilities is to value all properties in San Francisco, which in turn generates property tax revenue. In our 7 mile by 7 mile City, we have over 210,000 properties and close to 90% of them are residential, like the homes you and I live in. So, you might ask, how can we possibly value all these properties? Well, to better understand our work, we need to explain the state’s Proposition 13 law. In 1978, California voters passed Proposition 13. Under Prop 13, we value your property at market value when your first buy it. Every year after, that value goes up by the CPI, or the California Consumer Price Index. But if the CPI is more than 2%, Prop 13 caps the increase at 2% We’ll walk through the maximum increases Prop 13 would allow. Let’s take a home with an initial market value of $400,000. In the second year, your assessed value grows by a maximum of 2%, going from $400,000 to $408,000. In Year 3, that $408,000 is again increased by 2% to roughly $416,000. Every year after, the value grows by the maximum rate of 2% and that value is called your Prop 13 value. Keep in mind that as time goes by, your Prop 13 value may not be the same as market value. What do we mean by that? Let’s say that over the last five years, average home prices in San Francisco have gone up by roughly 10% every year. Under Prop 13, even though the market value of your home has gone up by 10% every year, your Prop 13 value is capped at 2% growth creating a difference between your market value and Prop 13 value. Know that the value resets when there is a change in ownership. A change in ownership means that the property has a new owner, maybe through a sale, a gift, an inheritance, or by adding or dropping names on title. At that time, the home will be reassessed to market value. That becomes the new starting point of value for the property. Just like before, the growth continues to be limited at 2% until the next transfer happens. Remember, the new owners are responsible for paying taxes at the new level from the first day that they own it. Value might also be added when construction happens on your property. That would be another instance when growth in your value might exceed 2%. Here we would add the value of the construction on top of your existing Prop 13 value. Every July, we’ll let you know what your assessed value is by sending you a letter called the Notice of Assessed Value. You can use that information to estimate your property taxes early. Please note that a separate office called the Treasurer & Tax Collector’s Office will send you a bill in October and they’re responsible for collections. For more information, please visit our website at sfassessor.org Thank you for watching.