It pays to be a rat in San Francisco.
During the last five years, The City has offered significant reward money to those who snitch on property owners who fail to pay their share in taxes.
Whistleblowers reporting tax cheats anonymously to the Assessor-Recorder can net up to 10 percent of what The City reclaims in lost revenue.
Last week, Supervisor David Chiu introduced an ordinance to continue the snitch payout program, formerly called “real estate watchdog.” The program, which expires on Feb. 16, has allowed The City to track down millions of tax dollars needed for cash-strapped city services, Chiu said.
“We’ve seen dozens of claims initiated by the public, several of which were eligible for rewards,” he said.
One person received nearly $60,000 after outing the owner of an apartment building at 480 Warren Drive who failed to pay $1.34 million in taxes during a five-year period.
The large majority of the reclaimed tax dollars go straight to The City’s general fund, which pays for vital services including schools and police protection.
The program specifically targets property owners who fail to report a change in ownership after purchasing a San Francisco property. That includes large commercial buildings as well as single-family homes, though the Assessor-Recorder focuses more on larger properties, where a greater sum of tax dollars can be reclaimed.
When ownership changes hands, a reassessment of the property must be done. Because a property’s value typically increases with time, so do the taxes that need to be paid on it.
“Because of difficulties in identifying changes of ownership of certain properties, some properties escape reassessment at full market value,” according to Chiu’s ordinance.
Millions of dollars are lost due to property tax cheats, according to Ting.
Since the program began in 2006, 62 whistleblowers have filed applications with the Assessor-Recorder, officials said.
Chiu’s ordinance slightly amends the existing program. It imposes a $100,000 limit in payouts to whistleblowers, rather than the existing ceiling of $500,000.
The aforementioned $60,000 payout to one whistleblower was the largest to date, the assessor-recorder said.
A Board of Supervisors committee is expected to hold a hearing on the legislation in the coming weeks.
Under a city reward program, it pays to snitch on property-tax cheats.
- 62 Applicants who have reported property tax cheats since the program began in 2006
- $1.34 million Largest amount of tax dollars The City has reclaimed in lost taxes after an anonymous citizen reported a tax cheat
- $59,903 Amount the anonymous tipster received from the $1.34 million tax bust
- $100,000 Maximum amount someone will be able to receive for reporting a property tax cheat under program’s revised rules
Source: Assessor-Recorder, Supervisor David Chiu