The San Francisco Transfer Tax: What Buyers and Sellers Need to Know in 2026

San Francisco's real property transfer tax is one of the most significant transaction costs in any home sale, yet many buyers and sellers don't fully understand how it works until they're reviewing closing documents. With rates that climb steeply as property values increase and a major legislative proposal now moving through City Hall, understanding this tax has never been more important.

This guide breaks down exactly how San Francisco's transfer tax works in 2026, what you'll owe at every price point, who typically pays, available exemptions, and how the proposed BUILD Act could reshape the landscape for high-value transactions.

What Is the San Francisco Transfer Tax?

The San Francisco real property transfer tax, formally known as the documentary transfer tax, is a tax imposed on the transfer of real property located within the City and County of San Francisco. It is codified under Article 12-C of the Business and Tax Regulations Code and applies every time a property changes hands, whether through a traditional sale, trust transfer, or other conveyance.

Unlike many California counties that charge a flat rate, San Francisco uses a tiered progressive structure where the rate increases based on the total consideration (sale price) of the property. This means that higher-value properties face substantially larger tax bills, both in absolute dollars and as a percentage of the sale price.

Current Transfer Tax Rates (2026)

San Francisco's transfer tax is calculated on the full sale price using the following tiered rate structure:

An important detail: the tax rate applies to the entire sale price based on which bracket it falls into, not progressively like federal income tax brackets. If your property sells for $1,000,000, the entire amount is taxed at the 0.75% rate, not a blended rate across lower brackets.

Transfer Tax Calculations at Common Price Points

To illustrate exactly what you can expect to pay, here are calculations at price points typical of San Francisco residential transactions:

Starter Condo: $850,000

At $850,000, the property falls in the $250,001 to $999,999 bracket:

• Transfer tax: $850,000 x 0.68% = $5,780

Median Single-Family Home: $1,500,000

At $1,500,000, the property is in the $1,000,000 to $4,999,999 bracket:

• Transfer tax: $1,500,000 x 0.75% = $11,250

Upper-Market Home: $3,200,000

At $3,200,000, the same bracket applies:

• Transfer tax: $3,200,000 x 0.75% = $24,000

Luxury Property: $5,500,000

At $5,500,000, the rate jumps significantly to the $5,000,000 to $9,999,999 bracket:

• Transfer tax: $5,500,000 x 2.25% = $123,750

Premium Property: $8,000,000

• Transfer tax: $8,000,000 x 2.25% = $180,000

High-Value Transaction: $12,000,000

At $12,000,000, the 5.50% rate kicks in:

• Transfer tax: $12,000,000 x 5.50% = $660,000

Notice the dramatic jump between $4,999,999 and $5,000,000. A property selling for $4,999,999 owes $37,500 in transfer tax, while one selling for $5,000,001 owes $112,500. This cliff creates strategic pricing considerations for properties near these thresholds.

Who Pays the Transfer Tax?

In San Francisco, the transfer tax is legally the responsibility of the seller. However, like most transaction costs in real estate, who actually bears this expense is negotiable and depends on market conditions.

In a seller's market: Sellers typically pay the full transfer tax, as buyers have less negotiating leverage and sellers can command favorable terms. Our seller's guide covers how to factor transaction costs into your pricing strategy.

In a buyer's market: Buyers may agree to pay part or all of the transfer tax as a concession to get the deal done. This is sometimes structured as a credit rather than a direct payment.

Common negotiation structures include:

• Seller pays 100% (most common in San Francisco)
• Split 50/50 between buyer and seller
• Buyer pays as part of a price reduction agreement
• Included as part of broader closing cost negotiations

For most residential transactions in San Francisco's current market, the convention remains that the seller pays the transfer tax. However, it is always a negotiation point, and buyers should be prepared for the possibility of sharing this cost.

The BUILD Act: Proposed Changes for High-Value Transactions

On February 25, 2026, Mayor Daniel Lurie and District 5 Supervisor Bilal Mahmood introduced the Balanced Update to Incentivize Local Development (BUILD) Act, a legislative package that would significantly reduce transfer tax rates for large real estate transactions.

What the BUILD Act Proposes

The BUILD Act would roll back transfer tax rates to pre-2020 levels for transactions of $10 million and above:

The legislation would not change transfer tax rates for single-family residences or any property transfer below $10 million. For the vast majority of residential buyers and sellers, rates remain unchanged.

Why This Matters

The 2020 rate increases, implemented through Proposition I, were originally pitched as a "mansion tax" but primarily affected multifamily apartment buildings and commercial properties rather than single-family homes. City officials estimate that approximately 52,000 approved housing units remain unbuilt in San Francisco's pipeline, partly because the elevated transfer tax rates make development projects financially unfeasible.

The BUILD Act aims to save housing developers approximately $32,850 per unit, representing up to 5% of total development costs. If enacted, the reduced rates would become effective on July 1, 2026.

Revenue Neutrality

To offset the revenue impact, a companion ballot measure for November 2026 would eliminate the transfer tax exemption currently available for deeds taken in lieu of foreclosure. City officials noted a dramatic increase in high-value commercial transfers claiming this exemption, and closing it would help maintain overall transfer tax revenue.

Transfer Tax Exemptions

Several categories of property transfers are exempt from San Francisco's transfer tax:

Full Exemptions:

• Transfers between spouses or registered domestic partners
• Transfers to or from a revocable trust where the transferor is the beneficiary
• Transfers resulting from a court order in divorce or dissolution proceedings
• Transfers to the federal government, state, or any political subdivision
• Transfers where the consideration is $100 or less

Partial Exemptions or Special Rules:

• Transfers of property subject to a recorded lien where the transferee assumes the debt may have modified calculations
• Certain corporate reorganizations and partnership dissolutions may qualify for exemption under specific conditions
• Transfers by foreclosure or deed in lieu of foreclosure (currently exempt, but the BUILD Act companion measure would eliminate this exemption if voters approve in November 2026)

It is critical to consult with a real estate attorney or tax professional to determine whether a specific transaction qualifies for any exemption. The rules are nuanced, and incorrectly claiming an exemption can result in penalties and interest.

How the Transfer Tax Compares to Other Bay Area Jurisdictions

San Francisco's transfer tax rates are among the highest in California, especially for properties above $5 million. Here's how the city compares to neighboring jurisdictions:

For properties in the $1 million to $5 million range, San Francisco's 0.75% rate is higher than the standard California county rate of 0.11% but more moderate than Oakland's or Berkeley's rates. The real divergence occurs above $5 million, where San Francisco's rates escalate dramatically.

Strategies for Managing Transfer Tax Costs

For Sellers

Price strategically near bracket thresholds. If your property could reasonably sell in the range of $4.8 million to $5.2 million, understand that pricing at $4,999,999 saves $75,000 in transfer tax compared to $5,000,001. This may influence pricing strategy and negotiation flexibility.

Time major transactions carefully. If the BUILD Act passes and you're selling a property above $10 million, waiting until after July 1, 2026, could save hundreds of thousands of dollars.

Explore exemption eligibility. Before assuming the full tax applies, consult with a tax professional about whether your transfer qualifies for any exemption, particularly for interfamily transfers or trust restructurings.

For Buyers

Factor the transfer tax into your total cost analysis. Even though the seller typically pays, the tax affects the net proceeds to the seller and can influence the negotiated sale price. Our buyer's guide walks through the full closing cost picture.

Negotiate transfer tax responsibility as part of the overall deal. In a balanced market, asking the seller to cover the full transfer tax while you adjust your offer price can be a viable strategy.

Understand the impact on investment properties. If you're purchasing a multi-unit investment property, the transfer tax on both acquisition and eventual disposition should be part of your return calculations.

Frequently Asked Questions

When is the transfer tax due?

The transfer tax is due at the time of recording the deed with the San Francisco Assessor-Recorder's Office, which typically occurs at closing. The title company or escrow officer handles the payment as part of the closing process.

Is the transfer tax deductible?

For sellers, the transfer tax is an expense of sale and reduces capital gains. For buyers, it is added to the cost basis of the property. The tax is not directly deductible as an income tax deduction for personal residences, but consult a tax advisor for your specific situation.

Does the transfer tax apply to refinances?

No. A refinance does not involve a transfer of ownership, so no transfer tax is owed. However, if a refinance involves adding or removing an owner from the title, a transfer tax may apply depending on the circumstances.

What happens if I sell just below a bracket threshold?

The IRS and local taxing authorities may scrutinize transactions structured primarily to avoid taxes. However, pricing a property at market value that happens to fall below a bracket threshold is entirely legitimate. Work with your agent to ensure the sale price reflects actual market conditions.

Will the BUILD Act affect my residential sale?

If your property sells for under $10 million, the BUILD Act would not change your transfer tax rate. The proposed reductions apply only to transactions of $10 million and above.

Plan Ahead for a Smoother Transaction

San Francisco's transfer tax is a significant cost that deserves careful planning, not a last-minute surprise at the closing table. Whether you're buying your first condo, selling a family home, or considering a high-value transaction, understanding the tax structure allows you to make informed decisions about pricing, timing, and negotiation strategy.

The proposed BUILD Act changes add another layer of complexity for high-value transactions, making it especially important to stay informed as the legislation progresses through the Board of Supervisors.

Ready to discuss how the transfer tax affects your specific situation? Contact The Goodrich Group for a personalized consultation. We'll help you understand the full cost picture and develop a strategy that maximizes your position, whether you're buying or selling in San Francisco.