By Novo Real Estate
San Francisco's transfer tax is one of the most misunderstood line items in a local real estate transaction. Most buyers assume it's the seller's problem, and in most residential transactions, they're right. But understanding how the tax works, how it's calculated, when it becomes negotiable, and what's currently happening at the policy level gives buyers a clearer picture of the transaction they're entering. Here's what we think every buyer in San Francisco should know about the transfer tax before sitting down at the closing table.
Key Takeaways
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San Francisco's transfer tax is tiered by purchase price, with rates that increase significantly at the $1M, $5M, and $10M thresholds
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By local custom, the seller pays the transfer tax in residential transactions
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California also imposes a state-level Documentary Transfer Tax of $0.55 per $500, separate from the city's tax
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Mayor Lurie introduced the BUILD Act in February 2026 to reduce transfer tax rates on transactions above $10M
How the Tax Is Structured
San Francisco's transfer tax is a one-time tax imposed by the City and County when a property deed is recorded, meaning it comes due at closing. It's calculated based on the purchase price of the property using a tiered rate schedule, where the applicable rate increases as the price crosses certain thresholds.
For most residential buyers in San Francisco, the relevant tiers are the first three. Properties selling between $250,000 and $999,999 are taxed at $3.40 per $500 of purchase price. Properties selling between $1,000,000 and $4,999,999 are taxed at $3.75 per $500. For context, on a $1.4 million purchase that falls in this bracket, the transfer tax amounts to approximately $10,500.
For most residential buyers in San Francisco, the relevant tiers are the first three. Properties selling between $250,000 and $999,999 are taxed at $3.40 per $500 of purchase price. Properties selling between $1,000,000 and $4,999,999 are taxed at $3.75 per $500. For context, on a $1.4 million purchase that falls in this bracket, the transfer tax amounts to approximately $10,500.
The Full Tiered Rate Schedule
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Up to $250,000 — $2.50 per $500 (0.50%)
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$250,001 to $999,999 — $3.40 per $500 (0.68%)
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$1,000,000 to $4,999,999 — $3.75 per $500 (0.75%)
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$5,000,000 to $9,999,999 — $11.25 per $500 (2.25%)
Who Actually Pays It
By local custom in San Francisco, the seller pays the transfer tax on residential sales. This is a well-established norm — the seller's escrow funds are used to cover the tax at the time the deed is recorded, and it appears on the seller's closing statement rather than the buyer's.
That said, it is negotiable. The purchase contract can assign payment to the buyer, split it between parties, or leave it to the seller entirely.
That said, it is negotiable. The purchase contract can assign payment to the buyer, split it between parties, or leave it to the seller entirely.
What Buyers Should Confirm Before Closing
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Review the purchase agreement to confirm who is contractually responsible for the transfer tax
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In new construction transactions, developers may pass transfer tax responsibility to the buyer; confirm this before executing the purchase contract, not at closing
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Your title or escrow officer will calculate the exact amount due based on the official city rate table
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California also imposes a state Documentary Transfer Tax of $0.55 per $500 of purchase price, which is separate from the San Francisco city tax and appears as its own line item at closing
Exemptions Worth Knowing About
Not every property transfer in San Francisco triggers the transfer tax. A defined set of exemptions exists under Article 12C of the San Francisco Business and Tax Regulations Code, and claiming one requires submitting a Transfer Tax Affidavit along with written documentation at the time of recording.
The most relevant exemptions for residential buyers involve transfers between spouses or registered domestic partners, certain inheritance or estate-related transfers, and specific corporate reorganizations where there is no change in beneficial ownership. For buyers purchasing through an LLC or other legal entity, additional rules apply.
The most relevant exemptions for residential buyers involve transfers between spouses or registered domestic partners, certain inheritance or estate-related transfers, and specific corporate reorganizations where there is no change in beneficial ownership. For buyers purchasing through an LLC or other legal entity, additional rules apply.
Common Transfer Tax Exemptions in San Francisco
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Transfers between spouses or registered domestic partners are generally exempt from the city transfer tax
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Certain estate-related transfers, including those from a decedent to a beneficiary, may qualify for exemption depending on the structure of the transaction
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Specific corporate reorganizations where there is no actual change in beneficial ownership may qualify
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All exemption claims require a completed Transfer Tax Affidavit and supporting documentation filed with the San Francisco Office of the Assessor-Recorder at City Hall
What's Changing at the Policy Level
Buyers purchasing properties above $10 million should be aware of a significant policy development. In February 2026, San Francisco Mayor Daniel Lurie and District 5 Supervisor Bilal Mahmood introduced the BUILD Act, a legislative package designed to reduce transfer tax rates on large transactions above $10 million as a way to stimulate stalled housing production and commercial development.
The BUILD Act proposes rolling back the 2020 transfer tax increases that pushed rates on transactions of $10 million or more to 2.75% and above. For buyers operating at the higher end of the San Francisco market, this is a development worth tracking.
The BUILD Act proposes rolling back the 2020 transfer tax increases that pushed rates on transactions of $10 million or more to 2.75% and above. For buyers operating at the higher end of the San Francisco market, this is a development worth tracking.
What the BUILD Act Means for Buyers
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The BUILD Act targets transfer tax reductions on transactions above $10 million
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A companion ballot measure for November 2026 would eliminate the deed-in-lieu-of-foreclosure exemption
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Buyers of larger multi-unit or mixed-use properties should work with their legal and tax advisors to understand how the legislation's progress could affect transaction costs
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Until the BUILD Act is enacted and any ballot measure passes, the existing tiered rate schedule remains in effect
FAQs
As a buyer, does the San Francisco transfer tax affect my closing costs directly?
In most residential transactions, no. The seller pays the transfer tax by local custom, so it doesn't appear on your closing statement. However, if the purchase agreement assigns the tax to you, or if you're buying new construction where a developer has structured the sale to pass the tax to the buyer, it becomes a direct cost.
Is the transfer tax the same for condos, single-family homes, and multi-unit properties?
The same tiered rate schedule applies to all residential property types in San Francisco. The rate is determined by the purchase price, not the property type. Multi-unit properties sold as a single transaction are taxed at the applicable tier for the full sale price, which can move a transaction into a significantly higher bracket than a comparable single-unit sale.
Can the transfer tax be included in the mortgage?
No. The transfer tax is a closing cost, not a financed expense, and it must be paid in cash at the time of recording. It's collected by the title or escrow company at closing from the funds of whichever party is contractually responsible for it.
Contact Novo Real Estate Today
San Francisco's transfer tax is one of many transaction details that looks straightforward until it isn't. At Novo Real Estate, we make sure our buyers understand every line item before closing, including how the transfer tax is calculated, who's paying it, and how purchase agreement language affects your exposure.
If you're buying in San Francisco and want a team that knows the market and the mechanics, reach out to us at Novo Real Estate to get started.
If you're buying in San Francisco and want a team that knows the market and the mechanics, reach out to us at Novo Real Estate to get started.
