This measure would double the transfer tax levied on properties worth $10 million or more. A transfer tax is charged by the city when a property is sold. Currently, a 2.75% tax is levied on buildings worth $10 million to $25 million, and a 3% tax is levied on buildings worth more than $25 million. If voters were to approve this proposition, both of these taxes would double, with a few exceptions.
If a nonprofit organization were to buy property worth more than $10 million to turn it into affordable housing, the tax would be reduced. If the city were to acquire the same property, the tax would be waived.
The Board of Supervisors has resolved to earmark these transfer tax revenues for a fund that would pay landlords who forgive the back rents owed by coronavirus-affected tenants. The revenues could also fund the development of social housing, which could be permitted in the city if voters were to approve Proposition K.
Opponents argue that the tax would, even though it isn’t intended for them, still affect small businesses. They also say that because the proposed transfer tax is so high and affects sellers, it would discourage the development of new housing, which is usually sold by a developer to an owner before its residents move in.
Hear interviews with the measure’s author, Supervisor Dean Preston, and an opponent, Jay Cheng with the San Francisco Chamber of Commerce: