Proposition I | californiachoices.org

My vote

Would increase the property transfer tax rate on transactions valued between $10 million and less than $25 million from 2.75% to 5.5%, and the rate on transactions valued at $25 million and above from 3% to 6%. Proposition I requires a simple majority (50% + 1) to pass.

Fiscal Impact: While estimated that Proposition I would generate additional revenue of $196 million per year on average, this is the City’s most volatile revenue source and estimates based on prior years’ activity may not be predictive of future revenues.

Next San Francisco County Measure: Proposition J

See Endorsements for Proposition I

Details

Pro/Con

Pro:

Proponents of Proposition I argue that the measure will generate much-needed emergency funds at a time when San Francisco faces a projected deficit of between $1.1 billion and $1.7 billion over the next two years, and the tax increase is only on sales and leases having a value of $10 million or more and will not impact homeowners, renters, or small business owners.

A YES vote on this measure means: The transfer tax rate would be increased on sales and leases of 35 years or more of real estate with a price of at least $10 million.

Con:

Opponents of Proposition I argue that San Francisco’s transfer tax is already among the highest in the country. They argue that if it is increased, businesses could choose to move elsewhere and already-approved market rate building may never be built, exacerbating our housing shortage.

A NO vote on this measure means: The transfer tax rate would not be increased.

In Depth

Background

The City collects a transfer tax on certain sales as well as leases of 35 years or more of residential and commercial real estate in San Francisco. The tax rate usually depends on the real estate’s sale price. The current transfer tax rates are:

Sale Price of Real Estate	Current Tax Rate
More than $100 and less than or equal to $250,000	0.50%
More than $250,000 and less than $1,000,000	0.68%
At least $1,000,000 and less than $5,000,000	0.75%
At least $5,000,000 and less than $10,000,000	2.25%
At least $10,000,000 and less than $25,000,000	2.75%
At least $25,000,000	3.00%

If property is sold to the City, the transfer tax does not apply. If property is sold to qualified affordable housing nonprofits, the transfer tax rate is no greater than 0.75%. State law limits the amount of revenue, including tax revenue, the City can spend each year. State law authorizes San Francisco voters to approve increases to this limit for a maximum of four years.

Proposition I Proposal

Proposition I would increase the transfer tax rate on certain sales as well as leases of 35 years or more of real estate with a price of at least $10 million. For property with a sale price of less than $10 million, the current transfer tax rate would not change. The proposed tax rates are:

Sale Price of Real Estate	Proposed Tax Rate
More than $100 and less than or equal to $250,000	0.50% (no change)
More than $250,000 and less than $1,000,000	0.68% (no change)
At least $1,000,000 and less than $5,000,000	0.75% (no change)
At least $5,000,000 and less than $10,000,000	2.25% (no change)
At least $10,000,000 and less than $25,000,000	5.50%
At least $25,000,000	6.00%

The transfer tax rate increase would not apply if property is sold to the City or to qualified affordable housing nonprofits. If the measure passes, the new tax rates would go into effect on January 21, 2021.

Source: Legal Text of Proposition I and League of Women Voters of San Francisco Nonpartisan Analysis of Proposition I

Voter Resources

Official Resources

City and County of San Francisco Department of Elections

Official San Francisco Voter Guide for November 3, 2020

Nonpartisan Analysis

San Francisco and California November 2020 Voter Guide. SPUR.