Effective October 21, 2024, this ordinance reduces the real property transfer tax rates for qualifying residential rental properties valued at $10 million and more. To qualify, properties must include at least 12% affordable units, be built with union labor, and have received a union pension fund investment of at least $25 million. The reduced tax rate applies to transfers through December 31, 2033.
Legal Authority
Frequently Asked Questions
How do I apply for the tax reduction?
A: To apply, property owners must obtain the OLSE certificate and submit it to the County Recorder along with an affidavit when transferring the property.
What are the new transfer tax rates?
A: The transfer tax rate is reduced from 5.5% to 3% for properties valued between $10 million and $25 million, and from 6% to 3% for properties valued at $25 million or more, provided they meet specific criteria.
What properties qualify for this tax reduction?
A: Properties must have at least 12% rent-restricted affordable units managed by the city department, be built using union labor, and have a minimum of $25 million in debt or equity from a union pension fund.
What is considered a “Qualified Residential Rental Property?”
A: A Qualified Residential Rental Property meets several criteria, including having a minimum percentage of rent-restricted units, receiving a Certificate of Final Completion, being constructed by workers represented by a labor organization, and having one or more Qualified Pension Plans.
What records do I need to maintain to claim the exemption?
A: Property owners must keep records demonstrating eligibility for the exemption and obtain a certificate from the Office of Labor Standards Enforcement (OLSE) confirming the property exemption.
Is there an expiration date for this exemption?
A: Yes, the tax exemption expires on December 31, 2033, or on June 30, 2029, for properties with a Certificate of Final Completion received before the effective date.
Contact Us
If you have questions about the Transfer Tax Reduction for Union Labor-Built and Union Pension Fund-Financed Housing email OLSE.ttax@sfgov.org.