What a Relief

It’s that time of year again! The below information may provide some relief as you’re working to file your taxes. Note: The following information is a general update. SFAA encourages members to work withs tax professionals. For a list of SFAA-affiliated tax professionals, turn to the Member Directory on page 48.

Winter Storm Tax Relief

Californians impacted by winter storms are eligible to claim a deduction for a disaster loss and will be granted an extension.

Claiming disaster losses: When filing the tax return, taxpayers should write the name of the disaster in blue or black ink at the top of the tax return to alert the Franchise Tax Board (FTB). If filing electronically, taxpayers should follow the software instructions to enter disaster information. If a taxpayer receives a late filing or payment penalty notice related to the postponement period, they should call the number on the notice to have the penalty abated.

Tax extension: To help alleviate some of the stress many have endured during this trying period, the FTB has extended the filing and payment deadlines for individuals and businesses in California until May 15, 2023.

This relief applies to deadlines falling on or after January 8, 2023, and before May 15, 2023, including the 2022 individual income tax returns due on April 18 and the quarterly estimated tax payments, typically due on January 17, 2023 and April 18, 2023.

The IRS announced tax relief for Californians affected by these winter storms. Taxpayers affected by these storms qualify for an extension to May 15, 2023 to file individual and business tax returns and make certain tax payments. This includes:

• Individuals whose tax returns and payments are due on April 18, 2023

• Quarterly estimated tax payments due January 17, 2023 and April 18, 2023

• Business entities whose tax returns and payments are due on March 15, 2023

• For a list of California declared disasters, visit ftb.ca.gov/file/business/ deductions/disaster-codes

Informal Review Request— March 2023

If you believe your property’s assessed value is higher than the current market value, you may request an Informal Assessment Review between January 2, 2023 and March 31, 2023. This applies to single-family dwellings, residential condominiums, townhouses, live-work lofts, and cooperative units.

We’ve heard from quite a few members who’ve filled out the form and ended up saving thousands on their tax bill. Why not give it a shot?

Online submissions are preferable (sfassessor.org > Forms & Notices), but alternately you may send your request to: San Francisco Assessor-Recorder’s Office, Attn: Informal Review, 1 Dr. Carlton B. Goodlett Place, City Hall, Room 190, San Francisco, CA 94102. You can also fax 415-554-7915 or email InformalReviewRP@sfgov.org. Be sure to keep a copy for your records.

Fire Alarm Upgrade Deadline— July 2023

By now, you’ve probably heard about the San Francisco fire alarm code section 1103.7.6.1, which was adopted in 2016. The entire process can take anywhere from two to four months, so if you haven’t started the process yet, don’t wait any longer.

Building owners of (R-2) residential buildings with three or more units with an existing building fire alarm system need to comply with sound level requirements for sleeping areas by July 2023. Alarm systems have to pass the “pillow test,” meaning the central fire alarm system must be loud enough for all residents to hear it from their bedroom (meeting a sound level of at least 75 dBA).

If this applies to you and you haven’t upgraded your fire alarm system, contact your existing fire alarm provider and see what they can do for you. They may already know what needs to be done and can help with your unique building. The alarm system professional you work with should consider whether or not you have electronic floor plans available, if there’s an elevator or sprinkler system in your building, or if you have construction or remodeling work planned.

For a list of SFAA-affiliated alarm system professionals, turn to page 48 for the member directory. For more information on the legislation and FAQs, visit sf-fire. org/308-sleeping-area-fire-alarm-requirements

SFAA Landlord Expo

Come join SFAA and local rental property owners for a free educational event covering all things multifamily housing. Hear from the Department of Building Inspection, the San Francisco Fire Department, and the San Francisco Rent Board. The event will end with a beer and pretzel happy hour where you can chat with vendors, including landlord attorneys, plumbers, property management companies, and more. The event will take place on May 18, 2023, at the Fort Mason Gallery 308. Look for more details at sfaa.org and on pages 42 and 61 of this magazine.

SFAA Updates

SFAA office reopening status: As the SFAA pivots to a hybrid in-office work model, members are welcome to make an appointment to visit the office with questions. However, please refrain from coming in person if you have tested positive for, were exposed to, or have symptoms of COVID-19.

The best way to have your questions answered is through email: MemberQuestions@sfaa.org. And just a friendly reminder, timely payment of membership dues is the best way to help the association help you.

SFAA member meetings: The first inperson member meeting since the 2020 shelter-in-place is scheduled! Mark your calendars for March 15, 2023.

Annual 2023-2024 Rent Increase

For rent-controlled units, the annual allowable increase amount effective March 1, 2023, through February 29, 2024, is 3.6%. This amount is based on 60% of the increase in the Consumer Price Index for All Urban Consumers in the Bay Area, which was 6% as posted in November 2022 by the Bureau of Labor Statistics.

To calculate the dollar amount of the 3.6% annual rent increase, multiply the tenant’s base rent by .036. For example, if the tenant’s base rent is $2,000.00, the annual increase would be calculated as follows: $2,000.00 x .036 = $72.00. The tenant’s new base rent would be $2,072.00 ($2,000.00 + $72.00).

To learn more about the San Francisco Rent Board, call 415-252-4602 or go to sfrb.org

PARENTTO-CHILD TRANSFERS

Q. If a 1% interest in a property is transferred from parent to child (or child to parent), do BOTH parties have to reside at the property in order to NOT have the property reassessed? My daughter now lives in Oregon and no longer wants an interest in the property.

A. We are understanding the question to be about the new law passed under Proposition 19 and the requirements to be excluded from reassessment.

Once our office determines that a change of ownership has occurred, state law under Proposition 13 requires us to reassess the property to its current fair market value as of the date the ownership changed. From the situation you described, where 1% of the property changed ownership (from the parent to the daughter), only that portion of the property that changed ownership would be subject to reappraisal. Since 1% of your property was transferred, our office would reassess only 1% of the property at its fair market value as of the date of the transfer and deduct the remaining from any existing base year value.

For the property not to be reassessed under the Prop 19 Parent to Child Reassessment Exclusion, the property must be the principal residence of the transferor and be (or become) the principal residence of the transferee (transferee must file a Homeowner’s Exemption claim form within one year of the transfer date to qualify for the Prop 19 exclusion). Also, Prop 19 has a value limit component, so it’s not like Prop 58 where it would be fully excluded. The assessor’s office will work on the value calculation based on the fair market value to determine if the transfer qualifies for the Prop 19 exclusion.

For more on Prop 19, turn to “Tax of all Trades” on page 20.