I Just Inherited a San Francisco Home. What Are My Options?

You did not ask for this. A parent passed away, or a family member left you a property, and now you are staring at a house full of decisions without knowing where to start.

Maybe you inherited a classic family home in The Sunset District or a multi-unit building in Noe Valley. Maybe there are siblings involved. Maybe the home has existing tenants, needs significant work, or you live across the country.

Whatever your situation, this guide is your starting point. Just a clear picture of your options and what to consider before making any major financial moves.

First, take a breath. You have time.

The most important thing to know upfront is that you do not have to make any decisions immediately. The property is not going anywhere. Rushing into a sale, a rental agreement, or any other major decision without understanding the full picture is one of the most common and costly mistakes families make in San Francisco.

There is one strict exception: if you are considering keeping the property and moving in to preserve your family's low property tax base under California's Proposition 19, you have a one-year window from the date of transfer to do so.

Step 1: Understand what you actually inherited

Before you can decide what to do, you need to understand how the property is held. This means finding out:

• Is it held inside a living trust?
• Does it need to go through the San Francisco County Probate Court?
• Is there a valid will, or did the owner pass away without one?
• Are there other heirs, co-owners, or siblings involved?
• Are there tenants living in the property?

The answers to these questions determine your timeline, your legal obligations, and your options. A probate sale involves the court system and takes longer. A trust sale can often move much faster. Tenant-occupied properties come with significant protections under San Francisco's strict rent ordinances. If you are not sure where to start, an estate attorney and a Certified Probate Real Estate Specialist can help you map this out quickly.

Step 2: Understand the property tax situation

California's Proposition 19 changed the rules for inherited property significantly in 2021. Depending on the type of property and what you plan to do with it, your property tax bill could stay roughly the same or increase dramatically.

• Single-family homes: You may be able to keep your parents' low property tax base if at least one inheriting child moves in as their primary residence within one year and files the correct exclusion paperwork.
• Rental properties and multi-unit buildings: There is no tax protection for investment spaces. The non-owner-occupied portions will be fully reassessed at current market value immediately.

This is one of the most misunderstood and financially consequential areas for San Francisco families. Read my detailed guide on what happens to property taxes when you inherit a San Francisco home for the full picture.

Step 3: Know your three main options

Once you understand the legal structure and the tax implications, your choices generally come down to three paths.

Option A: Sell the property. For many families, this is the most logical choice. It is especially true when keeping the property is financially unsustainable after a tax reassessment, when siblings cannot agree on a long-term plan, or when nobody wants the responsibility of managing real estate. If you sell shortly after inheriting, a stepped-up basis typically applies, meaning you may owe little to no federal capital gains tax on the sale.

Option B: Rent the property. Some families choose to hold the property and generate rental income. This can make sense if the projected rental income comfortably covers the new property tax bill and ongoing operating costs. Be aware that San Francisco has some of the strongest tenant protections in the country. Before placing a tenant, even a friend or family member, understand your obligations as a landlord in this city.

Option C: Move in and keep it. If you are in a position to make the inherited property your primary residence, this can preserve the low property tax base under Prop 19 and allow you to build long-term equity in one of the world's most valuable real estate markets.

Step 4: Get the right people around you

Inheriting a home in San Francisco means navigating real estate logistics, California probate law, property tax rules, and San Francisco rent ordinances all at once. No single professional covers all of these areas. You will likely need an estate attorney, a tax advisor, and a real estate agent who specializes in exactly this kind of situation.

As a Certified Probate Real Estate Specialist (CPRES) and Certified Trust and Probate Specialist (CTPS) with more than 15 years of experience in San Francisco real estate, I work with families navigating all three paths. I can help you understand your options, connect you with the right professionals, and guide you through whatever comes next.

Where to go from here

If you want to go deeper on any of these topics, read my detailed guides:

• What happens to property taxes when you inherit a San Francisco home under Prop 19?
• What happens when siblings inherit a home together in California?
• How does a probate sale work in San Francisco?

If you have recently inherited a property in San Francisco or the Peninsula and you are not sure what to do next, start with a conversation. No pressure, no obligation, just clarity. Let's Talk.