If you live, shop, or run a business in Daly City, taxes in Daly City come in several layers: a 9.875 percent sales tax at the register, a property tax that runs just above 1 percent of assessed value, a 12 percent tax on hotel and short-term rental stays, a 5 percent utility users tax, a gross-receipts business license tax, and a transfer tax at $1.10 per $1,000 when real estate changes hands. Several exemptions can shave real money off those bills, and most of them require you to apply.
Sales Tax: 9.875 Percent on Taxable Purchases
Every taxable sale in Daly City carries a combined rate of 9.875 percent.1California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rates That stacks California’s 7.25 percent statewide base with voter-approved district taxes, including Measure Q, a half-cent transactions and use tax Daly City voters passed in November 2020.2Daly City. Measure Q
Retailers collect the full amount at checkout and remit it to the California Department of Tax and Fee Administration, which splits it among state, county, and city funds. A $1,000 appliance costs you $98.75 in sales tax. Businesses that miss their reporting deadlines face a 10 percent penalty on the unpaid amount plus monthly interest.3Justia. California Code Revenue and Taxation Code 6591-6597 – Article 6 Interest and Penalties
Property Tax: What You Owe and When
Property tax in Daly City follows the Proposition 13 framework that governs all of California. The base ad valorem rate is capped at 1 percent of assessed value, with a small amount added to cover voter-approved bonds.4California State Board of Equalization. Publication 800-10 – Information Sheet Most parcels end up slightly above 1 percent once those bond obligations and special assessments are included.
Assessed value is not market value. The San Mateo County Assessor sets a base year value when you buy or build, then adjusts it annually by the California Consumer Price Index, capped at 2 percent per year.4California State Board of Equalization. Publication 800-10 – Information Sheet If you bought years ago, your assessed value is likely well below what the house would sell for now. The value only resets on a change of ownership or major new construction.
Due Dates and Late Penalties
The San Mateo County Tax Collector splits the secured property tax bill into two installments. The first is due November 1 and becomes delinquent after December 10. The second is due February 1 and becomes delinquent after April 10.5California Tax Service Center. Property Tax Function Important Dates Miss either date and you owe a 10 percent penalty on that installment. Keep sliding, and additional fees accrue until the county can eventually initiate a tax sale.
Parcel Taxes on the Same Bill
On top of ad valorem tax, Daly City owners see flat-dollar parcel taxes from local school districts. The Jefferson Union High School District collects under Measures E and Y, and the Jefferson Elementary School District collects its own.6County of San Mateo. School District Parcel Tax Exemption Homeowners 65 and older can apply for exemptions from these parcel taxes through the districts.
Property Tax Relief You Can Actually Claim
Several programs reduce what you owe. The biggest mistake is never applying.
Homeowners’ Exemption
Own and occupy your home as your primary residence and the California Constitution gives you a $7,000 reduction in assessed value.7California State Board of Equalization. Homeowners’ Exemption At a 1 percent base rate, that saves roughly $70 a year. One application with the San Mateo County Assessor is all it takes, and you only refile if you move.
Senior Property Tax Postponement
California’s Property Tax Postponement program lets homeowners aged 62 or older, or those who are blind or disabled, defer their entire current-year property tax bill. Household income must be $55,181 or less, you need at least 40 percent equity, and you cannot have a reverse mortgage on the property. The state records a lien and charges 5 percent annual simple interest on the postponed amount, with repayment due when you move, sell, or pass away without a qualifying spouse or partner still in the home.8California State Controller’s Office. Property Tax Postponement Fact Sheet It is a loan, not forgiveness, but for seniors on fixed incomes it can prevent a forced sale.
Proposition 19 Base-Year Transfers
Proposition 19, in effect since 2021, lets homeowners aged 55 or older, or those who are severely disabled, carry their existing property tax base to a replacement home anywhere in California up to three times. If the replacement costs more than the original, only the difference is reassessed at market value.9California State Board of Equalization. Proposition 19 For long-time Daly City owners sitting on a low assessed value, that difference between selling and getting hit with a full reassessment on the next place can be enormous.
Proposition 19 also tightened inheritance rules. Parents can pass a family home to a child with a limited property tax exclusion, but the child must use it as their primary residence, and the exclusion is capped at the current assessed value plus roughly $1,044,586 through February 2027.9California State Board of Equalization. Proposition 19 If the child does not move in, the property is fully reassessed. Inherited rentals no longer keep the parent’s low base.
Challenging an Over-Assessment
If you think your assessed value is too high, you can file with the San Mateo County Assessment Appeals Board. The filing window for 2026 assessments runs July 2 through November 30, 2026.10San Mateo County Assessor. Property Tax Relief Bring evidence that market value sits below the assessed value, such as recent comparable sales or documentation of property defects. Before filing a formal appeal, you can ask the Assessor’s Office for an informal decline-in-value review, which moves faster and takes less paperwork.
Business License Tax
Any business operating in Daly City needs a business license tax certificate before opening, under Municipal Code Chapter 5.04.11Daly City. Business License Requirements and Application The tax is tied to annual gross receipts. Rental property owners pay 0.11 percent of gross rental receipts, and other business types follow a tiered schedule from the Finance Department.
The application asks for your legal business name, federal tax ID, industry classification, and estimated gross receipts. For a physical location, the city confirms your activity complies with zoning before issuing the license. Home-based operators need the same license as a storefront. You can file in person at the Finance Department or electronically through the city’s online portal, which takes credit cards and e-checks.12Daly City. Staff Directory – Finance and Administrative Services Processing runs ten to fifteen business days, and the certificate must be displayed at your place of business. Renewals use the same gross-receipts calculation each year.
Transient Occupancy Tax on Short Stays
Hotels, motels, and short-term rental hosts in Daly City must collect a 12 percent transient occupancy tax from any guest staying 30 consecutive days or fewer, and remit it to the city quarterly.13Daly City. Short-Term Rentals If you list a room on Airbnb or a similar platform, the obligation is yours whether or not the platform collects on your behalf. Rules sit under Municipal Code Chapter 3.24, and failing to collect or remit draws penalties and back-tax assessments.
Utility Users Tax (and the Senior Exemption)
Daly City adds a 5 percent utility users tax to telecommunications, electricity, and natural gas service under Municipal Code Chapter 3.28. Providers bill it with your monthly service. For a household paying $200 a month in combined utilities, that is $10 a month, or $120 a year.
Residents aged 62 and older may qualify for an exemption.14Daly City. Utility Users Tax Exemption You apply through the city, and eligibility is based on your age as of December 31 of the prior year. One of the easier breaks to claim, and it keeps saving money every month.
Real Property Transfer Tax at Sale
When real estate changes hands in Daly City, the parties owe a documentary transfer tax. As a general law city, Daly City uses the standard California rate of $1.10 per $1,000 of sale price, split between city and county portions. A $1,000,000 sale carries an $1,100 charge, collected at closing and recorded with the deed. Daly City has not adopted a supplemental transfer tax above the state-authorized amount.
Federal Deduction for Taxes Paid
If you itemize on your federal return, you can deduct state and local taxes paid during the year, including California income tax (or sales tax as an alternative), property tax, and the local taxes above. Under the One Big Beautiful Bill Act signed in July 2025, the state and local tax deduction cap for tax year 2026 is $40,400 for most filers, or $20,200 for married taxpayers filing separately. The prior cap was $10,000.
Given Bay Area property values, many Daly City homeowners hit the SALT cap on property tax and California income tax alone, though the higher ceiling helps. Filers who pay no state income tax or who made large taxable purchases can deduct actual sales tax paid instead, using receipts or the IRS optional sales tax tables.15Internal Revenue Service. Use the Sales Tax Deduction Calculator Sales tax and income tax deductions are mutually exclusive. Pick whichever is larger, then add property taxes, subject to the overall cap.