Looking for the March 2024 Voter Guide? Click here.

Prop I
Transfer Tax Increase
Real Estate Transfer Tax

Increases the city’s transfer tax rate on the sale of properties valued at $10 million or more.

Vote NO

Jump to SPUR’s Recommendation

What the Measure Would Do

Proposition I would double San Francisco’s property transfer tax rate on commercial and residential properties valued between $10 million and $24.99 million from 2.75% to 5.5%, and on properties valued at $25 million or more from 3% to 6%.

Current Transfer Tax Rates and Proposed Changes

Property Sale Price

Current Transfer Tax (and tax rate)

Proposed Transfer Tax (and tax rate)


$2.50 per $500 (0.50%)



$3.40 per $500 (0.68%)


$1 million–$4.99 million

$3.75 per $500 (0.75%)


$5 million–$9.99 million

$11.25 per $500 (2.25%)


$10 million–$24.99 million

$13.75 per $500 (2.75%)

$27.50 per $500 (5.50%)

$25 million and above

$15.00 per $500 (3.00%)

$30 per $500 (6.00%)

The Controller’s Office estimates that this measure could raise an average of $196 million in annual revenue. However, the impact of the recession on real estate sales, the volatility of transfer tax revenues in general, and the possibility of tax avoidance behavior due to the increases all create significant uncertainty around revenue. Property owners who sell their properties to the city would be exempt from the tax, and those who sell their properties to nonprofit organizations would pay a reduced tax rate of 0.75%, regardless of value.

This measure is a general tax, and revenues would be deposited into the city’s General Fund. However, the measure’s author, Supervisor Dean Preston, introduced a resolution to deposit revenue generated by this increase into two new funds: the COVID-19 Rent Resolution and Relief Fund and a Social Housing Program Fund. The rent resolution fund would partially compensate landlords who waive rent payments for their tenants. The social housing fund would be used to finance the purchase and development of municipally owned affordable housing (for more information, see our analysis of Prop. K). Under this resolution, after December 31, 2021, all revenues from the transfer tax increase would be deposited into the Social Housing Program Fund.

Supervisor Preston also intends to use this measure as a tool to encourage landlords to sell their properties to the city or nonprofits. The measure’s author has expressed concern about speculative buying during the recession and believes that the combination of high transfer tax rates and the targeted exemptions would prevent land-grab behavior.

The Backstory

San Francisco charges a tax, equal to a percentage of a property’s sale price, on the transfer (sale) of commercial and residential property sold within city boundaries. The tax rate ranges from 0.5% to 2.5% and is typically paid by the seller. While other California cities charge a flat transfer tax rate, San Francisco is one of a few jurisdictions with a graduated rate based on the value of the property.1 San Francisco’s highest rate (and, in some cases, lowest rate) exceeds that of other cities in the Bay Area and around the state. In 2016, San Francisco voters approved a measure to increase tax rates for properties over $5 million by 25% and created a new rate for properties valued at over $25 million.

Transfer Tax Rates for Large Bay Area Cities


Combined City and County Transfer Tax Rate (2020)

San Jose


San Francisco






Santa Rosa



Transfer Tax Rates for Large California Cities


Combined City and County Transfer Tax Rate (2020)

Los Angeles


San Diego


San Jose


San Francisco






Long Beach








Source: California City Finance, “California City Documentary and Property Transfer Tax Rates,” 2019, http://www.californiacityfinance.com/PropTransfTaxRates.pdf

Transfer taxes extract value from property only at the point of sale and do not disincentivize job creation, as employment taxes might. Because the value of property is linked to public investments like parks or transit improvements, extracting a percentage of value when a property is sold is an appropriate way for San Francisco to recapture part of its investment. However, transfer tax revenue is a highly variable revenue stream for the city’s General Fund; revenues fluctuate depending on the strength of the economy and the number of real estate transactions. Between the fiscal years 2013–14 and 2016–17, transfer tax revenue increased by 36%. The following fiscal year more than erased these gains, as revenue fell by 46%.

This measure was placed directly on the ballot by five supervisors. As a general tax, it requires a simple majority (50% plus one vote) to pass.

Equity Impacts

California Proposition 13, passed in 1978, limits the amount of property tax that can be charged even when the value of a property grows significantly. In the 40 years since its passage, Prop. 13 has primarily benefited long-time property owners, many of whom have experienced little tax increase despite significant gains in their property values. Renters and would-be home buyers, on the other hand, have not accessed these benefits —two groups with disproportionately large shares of lower-income and non-white people. Meanwhile, racially restrictive zoning and lending practices have excluded people of color from the benefits of homeownership for generations. Overall, California’s housing system has helped millions of white people build wealth and excluded communities of color from those benefits. In the absence of a functioning property tax system, transfer taxes extract value only at the point of sale and can be an effective way to offset some of the inequitable impacts of the housing system. In addition, the benefits can be magnified if revenues are directed toward affordable housing production or renter protections.

On the other hand, high transfer tax rates can discourage new housing construction and can worsen affordability in high-cost regions. In San Francisco, as throughout the Bay Area, the undersupply of housing has led to fierce competition for both new and existing units, often resulting in displacement of lower-income residents.2 Similarly, the high cost of housing construction translates into higher costs for the units themselves, once they are available on the ownership or rental markets, disadvantaging those least able to pay. Achieving housing affordability – and the stability that comes with it – requires a significant increase in the supply of both market rate and affordable housing, and increasing transfer taxes runs counter to this by both increasing the price of the end unit and serving as a constraint on supply. For this reason, some argue that multifamily (and in some cases, commercial) developments should be exempt from transfer taxes.3 However, this measure wouldn’t offer those exemptions.

Another consideration is the intended use of the revenues raised by the transfer tax increase. If revenue is used for a rent relief fund, it would likely benefit Black and Latinx renters who have lost jobs. In California, as in the rest of the country, Black and Latinx people have suffered the highest rates of unemployment as a result of the pandemic-induced recession,4 mainly due to job losses in the retail and hospitality industries. In San Francisco, hospitality has been particularly hard-hit: In June, jobs were down 36% from the previous year. However, the intention to direct funds for rent relief is no guarantee that the money would be used for those purposes, particularly given the city’s historic budget deficit and other competing needs.  


  • This measure would appropriately focus tax rate increases on the highest-value properties, putting the burden on buyers and sellers with the greatest ability to pay.
  • Prop. I’s exemptions could incentivize landlords to sell their properties to the city and nonprofit buyers and could protect residential properties from speculation during the recession.
  • Transfer taxes extract value from real estate transactions, which generally do not impede economic activity and job creation.


  • Prop. I would significantly raise tax rates during an economic recession, at a time when those who are engaging in real estate transactions in order to build more housing are least likely to be able to afford additional costs.
  • Doubling the rates on high-value properties could slow or stop the construction of new housing, particularly larger multifamily projects that are in the pipeline but haven’t yet started construction, making housing more unaffordable.
  • This measure is intended to reduce speculative behavior. However, it is unclear whether Prop. I would have the intended effect.
  • Transfer tax revenue is volatile and dependent on the health of the overall economy. Given the economic shutdown and uncertainty in the real estate market, it is unclear how much additional revenue would likely be raised.
  • As a resolution, the companion measure directing new revenue from Prop. I to rental relief and social housing is not a guarantee and could be changed by a legislative vote to use the revenue for another purpose.
SPUR's Recommendation

Transfer taxes can be an effective way to offset some of the inequitable effects of California’s property tax system, which has excluded many from the benefits of homeownership. In San Francisco, transfer taxes can extract public value from the city’s high-value properties without directly impacting economic activity. However, a healthy housing system also relies on the provision of new homes — and high tax rates can delay or prevent new construction in the midst of a regional housing crisis.

SPUR believes that the intended uses of Prop. I revenue are critically urgent ones. Yet in the midst of historic budget deficits, there is no guarantee that Prop. I would fund what its supporters intend. San Francisco has some of the highest transfer tax rates in the state, and SPUR is concerned that doubling the rates for high-value properties could lead to unintended consequences for needed housing construction and affordability.

Vote NO on Prop I - Transfer Tax Increase

1 Under the California Constitution, cities may adopt their own charter and set rules around local governance, including raising additional taxes. San Francisco is one such “charter city” and has both raised transfer taxes and created a graduated rate structure. About a quarter of California cities are charter cities.

2 PolicyLink, “Oakland’s Displacement Crisis: As Told By the Numbers,” 2016, https://www.policylink.org/sites/default/files/PolicyLink%20Oakland's%20Displacement%20Crisis%20by%20the%20numbers.pdf

3 Shane Philips, “A Call for Real Estate Transfer Tax Reform,” 2020, https://www.lewis.ucla.edu/research/transfer-tax-reform

4 Employment Development Department, “California Demographic Labor Force,” July 2020, https://www.labormarketinfo.edd.ca.gov/specialreports/CA_Employment_Summary_Table.pdf

5 Recent SPUR research shows that in the last 20 years, the region has underbuilt housing by 700,000 units. See: Sarah Karlinsky, “What It Will Really Take to Create an Affordable Bay Area,” SPUR, 2020, https://www.spur.org/sites/default/files/publications_pdfs/what_it_will_really_take_to_create_an_affordable_bay_area.pdf