Thursday, September 3, 2009

Speaking of Piedmont School Privileges----

Don't forget that if your Junior has spent all three years at Piedmont High, you could move next summer, and still retain the right to attend Piedmont schools for that final year.

Check with the principal's office to confirm, but selling in the late spring might be a good strategy if your looking for cash to help convert your IRAs to Roth IRAs next year.....


  1. Hi Maureen,
    Do you discuss the property tax rate in Piedmont on your blog, or could you point me somewhere to read about it? I'm curious how it compares to Berkeley, Oakland, and other nearby cities.

  2. Hi: The property tax rate in Piedmont is identical to the rate across the state of California, limited to 1% of the purchase price by Prop 13 (w/ a maximum 2% per year escalator, assuming values are actually going up). So there's no difference there. (And some would argue that this is a problem--in Piedmont we can easily have a longtime homeowner paying $3,000 a year in ad valorem property taxes, while a neighbor buying an identical home next door this year pays $24,000 in taxes.

    Lenders typically assume that overall taxes (property tax plus parks bonds plus 911 service plus library improvements, etc.) in Berkeley, Piedmont and Oakland are roughly 1.45% of purchase price. That is, taxes that don't vary by the value of the property but rather are flat taxes on each home regardless of size, total about another half a percent on top of the state-limited 1% that's based on the value of the house at purchase.

    In general, Piedmont's school parcel tax is higher than Berkeley or Oakland, and other items on those cities' bills are higher than those in Piedmont. Read for more on the school parcel tax.

    In a big picture sense, all Piedmonters share in the costs of great public schools (including those without children in schools) while in a private school situation, the family would bear the entire cost of that great school.

    Note that I have a factsheet summarizing a biz-school comparison of buying a (more expensive) home in Piedmont and sending kids to public schools, vs. buying in less expensive neighboring areas and sending kids to private schools (not that that's the choice before many households). Email me directly for a copy of the summary and/or spreadsheet. The analysis breaks down by 1,2, 3, or 4 kids, etc.

    The "ah-ha" moment is that, assuming one can afford it, the Piedmont purchase is an investment that you'll eventually get back, with appreciation, when you sell; and the purchase of private schools is a straight expenditure with no later returns (beyond the returns of a great education, of course).

    Usually folks who do back of the envelope calcs think purely in cash-flow terms--how much is the extra mortgage/taxes vs. the extra tuition. But they forget that eventually you'll sell the house.

  3. Hi Maureen,
    I'm thinking of buying a property that straddles the Oakland-Piedmont border. I understand that I would have to pay taxes in both cities; does that automatically give me access to Piedmont schools? I called the School District Office but they were not clear.
    Thank you for your help.

  4. Hi: My understanding is that you can buy a property straddling the border, and then your assessment, and therefore your property taxes, are divided between the two cities. Your total property tax (that is, the Prop 13 portion of your total tax bill) would be the same 1% of final sales price, whatever that might be.

    In addition, you'd pay your share of the various flat assessments (for instance, Oakland's library tax, Piedmont's school and municipal taxes, the regional parks tax, etc.). The parcel taxes are per-parcel, and since you'd have a "parcel" in Piedmont, I'd assume you'd pay the full tax, even though, say, only 10% of your lot was in Piedmont. I believe this is a question for the county assessor's office, not either of the city's offices.

    The secretary to the superintendent has a list of all properties that have rights to Piedmont schools. There are a few houses in Oakland that have a Piedmont address, but do not pay taxes to Piedmont and thus don't get the schools (for instance, I remember there was a home up on Moraga at the top of the hill like this, clearly a couple blocks from the border, but it had always had a "Piedmont" address). And then there are a few with an Oakland address, but Piedmont school rights. This is the case on Boulevard and Annerly, I believe. In this case, a portion of the lot is within Piedmont. I think I heard at some point that the home had to have at least 10% of its lot in Piedmont to qualify.

    Note that I saw a property on the market just behind the Grand Lake Theater that advertised access to Piedmont schools. Just because some agent says that's the case doesn't mean it's true, unfortunately (he told me his client told him that.....)

    Your agent should be doing due diligence to make absolutely sure that you don't buy a home that doesn't qualify for Piedmont schools, if that's your goal. Likewise, it's the seller's agent's job to make sure if the house gets Piedmont schools access, that that's confirmed, advertised, and built into the sales price.

    Unfortunately, there's no free lunch. So any home on the Piedmont border should have a price that reflects the average $300,000 or so more that buyers typically pay for a Piedmont home, over an Oakland home (email me for a copy of the spreadsheet where I lay out the methodology for that price differential). It's also the case that buyers tend to pay a premium for a house close to the central part of town, so homes on Trestle Glen, Olive, and Abbott (above the cemetery) for instance tend to sell at a price discount--and often offer real value!