It's easy to pay someone else's property tax

Anybody can pay anyone else’s property tax, and it’s easier than ever with the recently enhanced online system in San Diego County.
A person can visit sdtreastax.com, type in an address, see any homeowner’s bill and pay either one or both of their property tax installments to the San Diego County Treasurer-Tax Collector.
Who writes the check for those payments is inconsequential to the county treasurer-tax collector’s office.
“There is no provision that says that you cannot make arrangements for someone else to pay your property tax bill for you,” a spokeswoman for treasurer-tax collector Dan McAllister said in a statement. “The tax collector does not inhibit nor are we in any way liable for a private arrangement for payment of property taxes. It is common practice.”
Last month, the treasurer-tax collector’s office mailed bills to 984,587 people who own property in the county, payable in two installments. The first payment is due Nov. 1. Overall, the bills are expected to generate $5.07 billion, beating last year’s total by $253 million.
If someone makes a payment in error, that person can submit a request for a refund to the county.
However, if someone pays someone else’s property taxes on purpose, the beneficiary of that payment may be expected to report that as taxable income, said Steve Gill, an accountancy professor at San Diego State University.
“It largely depends on the intent of the person making the payment,” Gill said.
Gill said, for example, if a father pays his son’s property tax for him out of love, that gift of generosity is not taxable.
However, if the son works for his dad, and instead of a paycheck, gets his property tax paid at the end of the year, that is clearly payment associated with services and therefore taxable income, Gill said. He noted for both situations whether the two are relatives or not does not matter for tax purposes.
Finally, say a person owns a private corporation, which does not pay him any salary or dividends. However, if the corporation makes a direct payment to the county for the owner’s property tax, that is likely taxable income as a dividend or direct compensation, Gill said.
Gill said it makes sense for the property tax system to be fairly open with regard to payments.
“Many individuals that have a mortgage on their property choose to make property tax payments to the bank rather than directly and have the property taxes paid by the financial institution through an escrow account,” Gill said. “As a result, I suspect that it is not uncommon for many property tax bills to be paid by someone other than the homeowner. There is generally very little risk in having an open ‘payment’ system because crimes that involve actually making the upfront payment are fairly rare.”