The ballot measure was proposed by San Francisco Supervisor Dean Preston, with current support from five other members of the San Francisco Board of Supervisors. If passed, the measure will amend the San Francisco Business and Tax Regulations Code to increase the Real Property Transfer Tax rate from 2.75% to 5.5% on transfers of real property with a consideration or value of at least $10 million and less than $25 million, and from 3% to 6% on transfers of real property with a consideration or value of $25 million or greater. Unlike the documentary transfer tax authorized by the State of California, San Francisco’s transfer tax does not permit any lien or encumbrances remaining on the property at the time of transfer to reduce the amount of tax that is levied.
In a press release from the spring, Preston indicated that one of the reasons for the tax increase was to deter post-COVID-19 speculative buying by opportunistic investors and allow the city to capture revenue from such transactions to help pay for the city’s COVID-19 recovery efforts. It has been estimated that doubling the transfer tax rates will provide additional annual revenue of up to $150 million for the City of San Francisco.