Julie Ching, R(B) and Dennis Yates, R(S)October 4th
Uncategorized

Two Myths About the Transfer Tax Increase and the Impact on SF’s High-End Real Estate Market

San Francisco Mayoral Candidate, John Avalos is probably hoping the city’s high-end home owners don’t remember that he was a lead proponent of Prop N, which significantly increased transfer tax rates on sales of homes and businesses exceeding $5M. With the passing of Prop N, transfer tax rates increased on December 17, 2010. The effect […]

San Francisco Mayoral Candidate, John Avalos is probably hoping the city’s high-end home owners don’t remember that he was a lead proponent of Prop N, which significantly increased transfer tax rates on sales of homes and businesses exceeding $5M.

With the passing of Prop N, transfer tax rates increased on December 17, 2010. The effect for homeowners is dramatic:  If a home sells for $5M the seller pays $37,500 in transfer tax fees.  If the home sells for $5,000,001, the seller assumes $100K in transfer tax fees.

Many predicted it would significantly slow luxury residential sales. I had also thought we would see a trend toward keeping sales prices below $5M unless the home was valued excessively above that.  So, with these two hypotheses in mind, let’s take a look:

The high-end real estate market continues to have strong sales.


In fact, year-to-date, 2011 real estate sales over $4M exceed sales for the same time period in 2010.


There have been more $5M+ sales in 2011 despite the significant increase in the transfer tax rate.

It seems that the increase in the cost associated with selling hasn’t affected the high-end real estate market as much as had been anticipated. That’s good news for the city’s coffers, and for those selling their multi-million dollar residences in San Francisco.

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About the Author

Julie Ching, R(B) and Dennis Yates, R(S)

Julie Ching, R(B) and Dennis Yates, R(S)

Ching and Yates are top producing listing and selling agents who have sold real estate valuing over $83,000,000 in the Kailua-Kona, Keauhou and general West Hawaii region, with an emphasis on residential homes and condos in luxury communities.

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