Unexpected property transfer tax boost eases budget tension 

The Board of Supervisors Budget and Finance Committee got a piece of good news Wednesday. The City Controller told the committee that the property transfer tax has come in much higher than expected this June, providing an additional $13 million more than expected.

In previous months, The City collected anywhere from $3.8 million to as much as $8.1 million in property transfer tax, a tax assessed on the value of the property when sold.  The City collected an average of $5.6 million each month this fiscal year.

But in June, the expected property transfer tax that will come in is $20.8 million. That extra money gives the committee some breathing room. The extra revenue allowed them to reject Mayor Gavin Newsom’s proposal to contract out services, which he had said would save about $13.3 million. The committee also used this unexpected good revenue news to justify rejecting Newsom’s proposal to allow a certain number of people to pay a fee to bypass a lottery system to be able to convert their units into condominiums. This proposal would have generated about $8 million in revenue.

The committee is expected to make its final decisions on Newsom’s proposed $6.5 billion city and county budget at their 5 p.m. meeting Wednesday. The full board will vote on the budget July 20.

The transfer tax rate is as follows:

If entire value or consideration is:

  • More than $100 but less than or equal to $250,000, the tax rate is $2.50 for each $500 or portion thereof;
  • More than $250 but less than $1,000,000, the tax rate is $3.40 for each $500 or portion thereof;
  • $1,000,000 or more, the tax rate is $3.75 for each $500 or portion thereof.
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