Fail: 100,776 / 46.09% Yes votes ...... 117,887 / 53.91% No votes

See Also: Index of all Propositions

Summary:

The Way It Is Now: The City collects a transfer tax on sales of most real property in San Francisco.The tax rate depends on the sale price of the property.The lowest tax rate is 0.5%, for property sold for $250,000 or less.The highest tax rate is 2.5%, for property sold for $10,000,000 or more.The tax rate is not affected by how long a property is owned.

The Proposal: Proposition G would impose an additional tax on the total sale price of certain multi-unit residential properties that are sold within five years of purchase or transfer.The following table shows the tax rates that would apply:

Length of Time Seller Has Owned the Property Tax Rate Less than one year 24% One to two years 22% Two to three years 20% Three to four years 18% Four to five years 14%

This additional tax would apply to sales occurring on or after January 1, 2015. This additional tax would not apply in the following circumstances:

• The property is a single-family house or condominium and does not include an in-law unit;
• An owner of the property, including a tenancy-in- common unit, has used it as a primary residence for at least one year immediately before the sale;
• The property contains more than 30 separate residential units;
• The property is sold for an amount equal to or less than what the seller paid for the property;
• The property is sold within one year of a property owner's death;
• The property is legally restricted to low- and middle income households;
• The property is newly built housing;
• The property meets the following criteria: it contains no more than two dwelling units; the seller applied on or before July 1, 2014, for a building permit for a project with a total construction cost of $500,000 or more; and the last permit was issued no more than a year before the sale of the property; or
• The sale of the property is exempt from the exist- ing transfer tax.

Fiscal Impact:

City Controller Ben Rosenfield has issued the following statement on the fiscal impact of Proposition G:

Should the proposed initiative ordinance be approved by the voters, in my opinion, it could have an impact on government revenues.The proposed ordinance may affect property sales and therefore the transfer tax revenues received by the City.

The ultimate effects of the ordinance would depend on property owners' behavior and on market conditions. In the event that the high transfer tax rates imposed by the ordinance cause owners to hold property for longer than they would have otherwise, and/or reduces the number of property transactions, the ordinance would effectively decrease the transfer tax revenue received by the City.

The amendment provides for a surtax added to the existing property transfer tax imposed on certain residential properties if they are purchased and sold within a five year period. Current transfer tax rates range from 0.5% of the sale price for properties less than $250,000 to 2.5% for properties greater than $10 million.The surtax would range from 24% to 14% depending on the length of time a property was held between purchase and sale. Exemptions are provided for various types of properties and ownership circumstances.

In a typical year over the last eight year period, approximately 60 properties would have been subject to the tax had it been in effect, and been subject to an average surtax amount of approximately $413,000.

Meaning of Voting Yes/No

A YES vote on this measure means:

If you vote "yes," you want the City to impose an additional tax of between 14% and 24% on the total sale price of certain multi-unit residential properties that are sold within five years of purchase or transfer, subject to certain exceptions.

A NO vote on this measure means:

If you vote "no," you do not want the City to impose this additional tax.