As a general contractor in San Francisco, one of the most common questions we hear from clients is:

“If I pull permits for my remodeling project, will it trigger a reassessment of my property and increase my property taxes?”

It’s a valid concern, especially with the rising cost of living in San Francisco. In this post, we will break down how permits relate to property reassessment, why permits are essential, and which types of projects are likely to impact your property taxes.

What Triggers Property Reassessment in San Francisco?

In San Francisco, property reassessment happens when work on your home adds value to the property. The San Francisco Office of the Assessor-Recorder reviews permits issued by the Department of Building Inspection (DBI) to determine if the scope of work qualifies as assessable.

Here is what you need to know:

Value-Adding Projects Trigger Reassessment: Home additions, major renovations, or new structures like an ADU often lead to reassessment.
Routine Maintenance Does Not Trigger Reassessment: Repairs or like-for-like replacements (e.g., replacing a water heater or fixing a roof) usually don’t Increase your property’s assessed value.

For property tax purposes, only the value added by the improvement is assessed, not the entire property.

Why Permits Are Essential

As a general contractor, we always pull permits when required because it’s the law and it’s s for your protection. Here’s why permits are non-negotiable:

Legal Compliance: San Francisco has strict building codes to ensure safety and quality. Permits confirm the work meets these standards.
Avoiding Penalties: Failing to pull permits can result in fines, delays, and even stop-work orders.
Future Property Sales: Unpermitted work can complicate inspections and reduce buyer confidence.
Insurance Coverage: Work done without permits may not be covered by your homeowner’s insurance.

Skipping permits might seem like an easy way to avoid reassessment, but the risks far outweigh the benefits.

What Projects Require Permits?

The San Francisco DBI requires permits for a variety of construction activities. Here is a list of common examples:

Additions: Adding new bedrooms, bathrooms, or square footage.
Remodels: Kitchen and bathroom upgrades with structural, plumbing, or electrical changes.
Structural Work: Modifying load-bearing walls, roofs, or foundations.
New Construction: Building an ADU, garage, or other standalone structures.
System Upgrades: Installing or upgrading electrical, plumbing, or HVAC systems.
Demolition: Removing parts or all of a structure.

Even some smaller projects, like replacing windows or adding a deck, may require permits. It’s always best to consult with a contractor or DBI to confirm.

Projects That Increase Property Value (and May Trigger Reassessment)

The following projects are likely to lead to an increase in your property’s assessed value:

Home Additions: Adding a new bedroom, bathroom, or any additional living space.
Major Renovations: Significant upgrades to kitchens, bathrooms, or other key areas.
New Structures: Building an ADU, deck, or garage.
Structural Enhancements: Reinforcing or modernizing your foundation or roof.

These improvements add functionality and market appeal, which increases property value and reassessment.

Projects That Don’t Increase Property Value

Some types of work, even when permitted, don’t typically lead to reassessment:

Routine Maintenance: Fixing leaks, replacing broken fixtures, or painting.
Like-for-Like Replacements: Replacing a roof or appliance with an equivalent model.
Seismic Retrofits: Structural improvements required for safety may not increase value if they don’t add new functionality.

The San Francisco Assessor-Recorder’s Office provides clear guidance on which projects are excluded from reassessment.

Navigating Permits and Reassessment

The idea of pulling permits and triggering reassessment may seem overwhelming, but it’s a manageable process when you work with the right team. Make sure to choose a contractor that is there to guide you every step of the way, ensuring your project is compliant with local codes while helping you achieve your goals.

If you’re unsure whether your project requires a permit or how it might impact your property taxes, feel free to reach out. We are here to help you navigate the complexities so you can focus on bringing your vision to life.

Frequently Asked Questions (FAQ)

1. Will pulling permits for my remodel automatically increase my property taxes?

Not necessarily. The San Francisco Assessor-Recorder’s Office only reassesses the value added by certain improvements, such as home additions, major renovations, or new structures. Routine maintenance and like-for-like replacements typically do not trigger reassessment.

2. What types of home improvements will increase my property’s assessed value?

Projects that expand your home’s size, enhance its functionality, or significantly upgrade major systems will likely increase property value. Examples include adding bedrooms or bathrooms, building an ADU, or fully renovating a kitchen or bathroom.

3. What home improvements won’t trigger reassessment?

Most routine repairs and maintenance work, such as painting, replacing a roof, updating appliances, or making seismic safety upgrades, generally do not lead to a reassessment.

4. Why do I need permits for my remodeling project?

Permits ensure that work is completed safely, legally, and up to code. They help protect homeowners from potential fines, insurance issues, and problems when selling the property. Additionally, unpermitted work can cause delays and costly corrections if discovered later.

5. What happens if I remodel without a permit in San Francisco?

If unpermitted work is discovered, the city may issue fines, require you to obtain retroactive permits, or even demand that the work be redone to meet code requirements. This can be expensive and delay your project significantly.

6. How can I find out if my project requires a permit?

The San Francisco Department of Building Inspection (DBI) provides guidelines on which projects require permits. Generally, any new structural, plumbing, electrical, or major renovation work will need a permit.

7. If my property is reassessed, how much will my taxes go up?

Only the value of the new improvement is added to your property’s taxable value. For example, if your home was originally assessed at $1,000,000 and you complete a $100,000 remodel that qualifies for reassessment, your new assessed value may be $1,100,000. Since property taxes in San Francisco are roughly 1.2% of assessed value, this would result in an increase of about $1,200 per year.

8. Can I dispute a property reassessment if I think it’s too high?

Yes, if you believe your reassessment is incorrect, you can file an appeal with the San Francisco Assessment Appeals Board. Providing documentation and working with a professional can help support your case.

10. How can I remodel my home while minimizing property tax increases?

If you’re concerned about reassessment, focus on maintenance and cosmetic updates rather than expansions or major structural changes. Consulting with a contractor and tax professional before starting your project can also help you make informed decisions.

Useful Links/References

How the Assessor-Recorder’s Office reviews DBI permits to determine if a project is assessable or excluded from reassessment:

https://www.sf.gov/information--learn-about-new-construction-remodel-and-repair

Department of Building Inspection (DBI) information on Permitting:

https://www.sf.gov/departments--department-building-inspection--permit-services-dbi

Will Pulling Permits for Your San Francisco Remodel Increase Your Property Taxes?