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San Francisco County, CA November 4, 2008 Election
Proposition N
Changing Real Property Transfer Tax Rates
City of San Francisco

Ordinance - Majority Approval Required

Pass: 223,808 / 68.56% Yes votes ...... 102,621 / 31.44% No votes

See Also: Index of all Propositions

Results as of Jan 24 10:41am, 100.0% of Precincts Reporting (580/580)
Information shown below: Fiscal Impact | Yes/No Meaning | Arguments |

Shall the City increase its transfer tax on sales of real estate worth more than $5 million to 1.5% and reduce the tax by up to 1/3 on sales of residences where the seller installed solar energy systems or made seismic safety improvements?

Fiscal Impact from City Controller:
Should this ordinance be approved, in my opinion, it would result in a net annual tax revenue increase to the City of approximately $29 million. The ordinance would change the property transfer tax rate for properties with a sale price of over $5 million from 0.75% to 1.5%.

If the proposed 1.5% tax rate had been in effect during the past ten fiscal years, it would have generated, on average, approximately $32 million annually in additional gross revenue, decreased by approximately $3 million from new exemptions for solar installations and seismic improvements proposed in the ordinance. Note that actual future revenue under the proposed transfer tax would vary widely from year to year because large commercial property transactions occur irregularly and are strongly affected by changes in the financial markets. During the past ten year period, the estimated revenue under this tax rate would have ranged widely--from $19 million in Fiscal Year 1997-1998 to $80 million in Fiscal Year 2006-2007.

The proposal would exempt up to one third of the transfer tax on residential properties for eligible solar installations and seismic improvements. Finally, the ordinance clarifies that acquisitions or transfers of ownership interests in a legal entity are subject to the transfer tax. Because current law does not require owners to record a deed at the time of such transfers, no data are available to estimate the value of these transactions.

Meaning of Voting Yes/No
A YES vote on this measure means:
If you vote "yes," you want to increase the transfer tax rate to 1.5% for sales of real estate worth more than $5 million and reduce the tax by up to 1/3 for sales of residential property with solar energy systems or earthquake safety improvements.

A NO vote on this measure means:
If you vote "no," you do not want to make these changes.

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Arguments For Proposition N Arguments Against Proposition N

During these tough economic times, many San Francisco homeowners, renters and small businesses are struggling with their tax burdens. Yet at the same time, a serious loophole in our real estate transfer tax is allowing multinational corporations to evade paying their fair share.


The multinational real estate interests use shell companies and tricky accounting to game our tax system, costing the City tens of millions of dollars in lost revenue. Yes on N closes the loophole that allows them to shelter their transactions + creating a more equitable tax structure and saving essential services threatened by our massive deficit.


Multi-national corporations rely on our transit, public safety and infrastructure services. Yet they are not paying their fair share of the costs of these services + leaving the burden to the rest of us. Yes on N is real reform that raises the real estate transfer tax on properties sold for $5 million or more. Small property owners and homeowners won't pay more + over 99% of residential transaction would not be impacted.


Proposition N also contains incentives for property owners to make solar and seismic improvements to their property, by reducing the transfer tax when those types of improvements are made. This is good for our environment and for public safety.


Please join with San Franciscans united for fair, progressive tax reform. Vote YES on Proposition N.

San Francisco Democratic Party
Assessor-Recorder Phil Ting*
Treasurer Jose Cisneros
Board of Supervisors President Aaron Peskin
San Francisco Planning and Urban Research Association (SPUR)
San Francisco Firefighters Local 798
Sierra Club

  • For identification purposes only; author is signing as an individual and not on behalf of an organization.

Rebuttal to Arguments For
We all support an equitable tax system but this measure is not just tax reform it is a significant increase in the tax on selling property.

In the following year the City's own projections already show a budget shortfall of $250 million. This means that once again we are spending more than we have. Even in our own households we all know that we should not spend more than we have in our bank accounts + nor should the City.

At a time when the economy is showing signs of slowing down, it is important not to discourage economic activity. Taxing more for property sales could possibly do just that. We should be taking actions that encourage a diverse and robust economy not raising taxes and potentially stifling that activity. The City already places significant burdens on our economy, we do not need another one at this time.

Real reform we can all support means getting the City's financial house in order, developing a plan to control spending and addressing our long-term structural deficit.

Supervisor Carmen Chu
Supervisor Michela Alioto-Pier

The City has a spending problem not a revenue problem. Over the past several years the City's revenue has grown but our expenses have grown faster. This is why we face a budget deficit year after year.

We don't need another tax; we need to fix the structural problems with our budget.

The real state property tax is among the most volatile sources of revenues for the City. The amount of money the City receives from this tax can swing wildly. Over the past 10 years, we have seen it vary from a $47 million low to a $144 million high. It all depends on the economy, interest rates and other factors completely out of the City's control.

Now we want to balance our budget on this volatile tax. That is a mistake.

This tax increase might even decrease the amount of money the City takes in from its current property transfer tax. If this tax passes, businesses and individuals may choose not to buy or sell property because of the costs associated. We are in the midst of an economic downturn and we should be encouraging, not discouraging economic growth and investment so San Francisco can continue to thrive.

Proposition N is a tax for no identified purpose. The money would simply go into the general fund and could be spent for any purpose, without any further input from taxpayers.

This is the wrong tax at the wrong time. The City should be working to fix its structural budget problems, control spending and then if necessary go to voters with specific proposals if we need to raise taxes.

Please join us in voting No on Proposition N

Supervisor Carmen Chu
Supervisor Michela Alioto-Pier

Rebuttal to Arguments Against
Contrary to assertions by opponents, Proposition N is not an effort to balance the city's budget. It is a straightforward, progressive reform measure that will ensure that city services are funded in the most equitable and fair manner possible.

  • Proposition N closes tax loopholes that are being exploited by multi-national real estate corporations at the cost of tens of millions of dollars that should rightfully be funding vital services for San Franciscans.
  • Proposition N ensures that huge real estates pay their fair share in real estate transfer taxes, so that homeowners and small businesses are not overly burdened.
  • Proposition N only impacts properties worth more than $5 million, meaning the vast majority of homeowners and small property owners will be unaffected.
  • 99% of San Francisco homeowners are not impacted by Proposition N

Proposition N is broadly supported by a diverse group of San Franciscans, including the San Francisco Planning and Urban Research Association (SPUR), San Francisco Firefighters, San Francisco Democratic Party, the Sierra Club, Assessor-Recorder Phil Ting, and Treasurer Jose Cisneros.

Please join us in promoting fair tax reform that relieves the burden San Francisco renters, homeowners, small businesses and small property owners.

San Francisco Democratic Party
Assessor-Recorder Phil Ting
Treasurer Jose Cisneros
Board of Supervisors President Aaron Peskin
San Francisco Planning and Urban Research Association (SPUR)
San Francisco Firefighters Local 798
Sierra Club

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Created: January 24, 2009 10:41 PST
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