San Francisco puts a bounty on property tax evasion

Bloomberg reports:

Under a law that went into effect last week, San Francisco can pay as much as $500,000 to watchdogs like Lesser who uncover tax evasion by investors who hide the acquisition of property.

"This process is costing the city millions of dollars," assessor Phil Ting, 36, said in a telephone interview. "We are not going to tolerate any malfeasance or fraud."

The ordinance may be the first citizen-watchdog program related to property taxes in the U.S., said Lisa Daniels, the executive director of the International Association of Assessing Officers in Kansas City, Mo.

"We can't be 100 percent sure, but it appears to be a very unique proposition," Daniels said.

San Francisco officials can't put an exact amount on how much tax revenue could be recovered. Lesser's case, which involved property owned by International Business Machines Corp., brought in more than $20 million, said Owen Clements, chief of special litigation at the San Francisco City Attorney's Office. In fiscal 2004, San Francisco collected $1.18 billion in property taxes.

Under California law, a property reassessment, which usually leads to higher taxes, occurs only after real estate changes hands or is upgraded. That creates an incentive for some owners to hide transactions, Ting said. Tax officials rely on buyers and sellers to declare ownership changes so the higher taxes can be collected promptly rather than retroactively.

You can see why a place like San Francisco has a huge incentive for artificially high property prices.Lower prices would mean less tax revenue.Tax,spend,regulate,and spy on your neighbor.Is this Blue America?