Buying or selling in San Francisco? One line on your closing statement can swing your bottom line by thousands: the city’s transfer tax. If you plan ahead, it will not surprise you or derail your negotiation. In this guide, you will learn what the San Francisco transfer tax is, who typically pays it, how it is calculated, and how it can shape your offer strategy and net proceeds. You will also see clear, illustrative examples and a simple checklist to keep your closing on track. Let’s dive in.
What the SF transfer tax is
The San Francisco transfer tax, also called the documentary transfer tax, is charged when a deed is recorded for real property in San Francisco County. It is separate from recording fees, escrow fees, title insurance, and state or county assessments.
The City and County of San Francisco administers this tax through the Treasurer and Tax Collector. The Assessor-Recorder handles deed recording, and the tax is collected at recording. In practice, your title and escrow company calculates and collects the tax at closing.
Payment happens at closing when the deed is recorded. The amount depends on the city’s current rate schedule. That schedule can change, so you should always confirm the exact amount for your transaction with your title or escrow officer.
How rates work and how to estimate
Cities use two common structures: flat-rate or progressive schedules. San Francisco uses a schedule that varies by transaction size, with higher rates for higher-priced sales. Because rules have changed over time, confirm the current schedule and how it applies on your closing date.
How the math works in practice depends on how the city writes its schedule. Some schedules apply a single bracket rate to the entire price. Others apply marginal rates to different portions of the price. Your title or escrow officer will apply the city’s official method to your purchase price.
If you want a rough estimate early on, you can model a percentage against your target price, then refine it with the title company. Mark it clearly as an estimate.
Quick price-tier illustrations (illustrative only)
These are simple, hypothetical examples for planning. Verify the actual amount with your title company.
- Entry condo example: price $900,000. If you model an illustrative 0.5 percent, estimated tax ≈ $4,500.
- Mid-tier single-family example: price $1,800,000. If you model an illustrative 0.65 percent, estimated tax ≈ $11,700.
- Upper-mid example: price $3,000,000. If you model an illustrative 0.75 percent, estimated tax ≈ $22,500.
- Luxury example: price $5,500,000. If you model an illustrative 1.0 percent, estimated tax ≈ $55,000.
- Ultra-luxury example: price $15,000,000. If you model an illustrative 1.5 percent, estimated tax ≈ $225,000.
Again, these are not the city’s current rates. They are planning placeholders only. Have escrow compute the official figure for your deal.
Who pays in San Francisco
By law, the transfer tax is negotiable in the purchase contract. The parties can agree that the seller pays, the buyer pays, or that they split it. Market custom has often put the tax on the seller, but customs shift with market conditions and price tier. In competitive seller’s markets, buyers sometimes agree to pay the tax to strengthen their offer. In balanced or buyer’s markets, sellers may still pay or negotiate a split.
Common contract approaches include:
- “Seller to pay documentary transfer tax.”
- “Buyer to pay documentary transfer tax.”
- “Parties to split documentary transfer tax equally.”
A seller’s net sheet typically subtracts the estimated transfer tax so you can see your projected cash at closing. If you prefer a different allocation, your agent can structure the offer terms to reflect that.
Offer strategy for buyers
If you face multiple offers, offering to cover the transfer tax can make your net to seller more attractive without changing the purchase price. Weigh this against your total funds to close. If you are using financing, confirm with your lender and escrow officer how this cost will appear on your closing disclosure.
Net sheet planning for sellers
On higher price points, the transfer tax can be a significant line item. Seeing this in your net sheet early helps you set a list price, negotiate with confidence, and avoid last-minute surprises. If the number feels outsized, consider negotiating an allocation in counter offers, or ask for other concessions that preserve your net.
Exemptions and special situations
Some transfers are exempt or treated differently. These rules are technical and documentation heavy, so involve escrow early. Common categories include:
- Transfers between spouses or domestic partners, or incident to divorce.
- Transfers into or out of certain revocable living trusts where the transferor and beneficiary are the same person.
- Transfers pursuant to court order, foreclosure trustee sales, or sheriff’s sales under specific conditions.
- Government property transfers or certain nonprofit transfers.
- Corporate reorganizations that meet defined criteria.
If you are considering a 1031 exchange, remember that the documentary transfer tax is separate from income tax deferral rules. Many exchanges still involve a recorded deed, which means the transfer tax can still apply. Coordinate early with your qualified intermediary, CPA, and escrow officer.
Costs often confused with transfer tax
The transfer tax is only one of several closing items. You will also see:
- Recording fees for the County Recorder.
- Title and escrow fees, plus title insurance premiums.
- Lender-related charges, prepaid interest, and impounds for buyers.
- Deed preparation or document fees.
These appear as separate line items on the closing statement. Your escrow officer will label each clearly so you can track your total.
Practical examples for planning
Below are simple, illustrative walk-throughs. Your actual numbers will differ based on the city’s schedule and your contract.
Scenario A, seller of a condo at $900,000
- Illustrative transfer tax at 0.5 percent ≈ $4,500.
- If seller pays, it reduces seller’s net proceeds by that amount, along with other costs like commission and payoff.
- If buyer offers to pay, seller’s net rises by that same amount, which may help the buyer win in a close competition.
Scenario B, buyer of a single-family home at $3,000,000
- Illustrative transfer tax at 0.75 percent ≈ $22,500 if buyer agrees to pay in the contract.
- Add this to funds to close along with down payment, closing costs, and reserves.
- If seller pays, your funds to close may drop by that amount, though the purchase price and other terms may reflect the negotiation.
Scenario C, luxury sale at $15,000,000
- With an elevated illustrative rate, the tax can reach six figures.
- Allocation often becomes a key bargaining point along with other concessions such as timing, inclusions, or price adjustments.
Checklists to stay organized
Use these quick lists to keep your closing smooth and predictable.
For sellers
- Ask your agent for a seller net sheet that includes a current transfer tax estimate.
- Decide your preferred allocation language and reflect it in your listing guidance and counters.
- Flag any trust or vesting changes before you list to avoid unexpected tax triggers.
- Loop in escrow early to confirm documentation for any exemption you believe applies.
For buyers
- If your offer includes buyer payment of transfer tax, add that estimate to your funds to close.
- Ask whether any exemptions apply to the seller’s situation, and confirm how they are documented.
- For cash or 1031 exchange purchases, work with your escrow officer on timing and any special forms tied to deed recording.
Your professional team
- Title and escrow: for the official calculation and payment at recording.
- Real estate agent: for strategy, contract language, and net sheets.
- Real estate attorney: for complex vesting, trusts, or entity transfers.
- CPA or tax advisor: for capital gains, 1031 exchanges, and overall tax planning.
Where to verify current rates
Because rates and brackets change, always verify the current schedule with the City and County of San Francisco and your title or escrow company. Your escrow officer will use the official city schedule and apply the correct calculation method for your price tier and closing date.
The bottom line
In San Francisco, the transfer tax is a negotiable, high-impact number that affects both your offer strategy and your net proceeds. Early planning, clear contract language, and an exact escrow calculation keep you in control. If you want a personalized plan for your price point, property type, and timing, reach out for a tailored walkthrough of your options.
Ready to model your net and choose the right allocation strategy? Request a private consultation with Rowbotham- Brian/Andrea to get a customized estimate, negotiation plan, and closing timeline.
FAQs
Who normally pays the San Francisco transfer tax?
- It is contractually negotiable. Custom often has sellers paying, but market conditions and price tier can shift that practice.
How much will the San Francisco transfer tax cost me?
- It depends on your sale price and the city’s rate schedule. Your escrow or title officer will compute the exact amount for your closing date.
Are there San Francisco transfer tax exemptions?
- Yes. Common categories include certain spouse or partner transfers, specific trust transfers, some court-ordered or foreclosure-related transfers, and qualifying nonprofit or corporate reorganizations.
Does the transfer tax affect my capital gains taxes?
- The transfer tax is a closing cost and separate from federal and state capital gains taxes. Speak with a CPA for your income tax situation.
Can the buyer and seller negotiate who pays the transfer tax?
- Yes. You can agree that the seller pays, the buyer pays, or that you split it. Allocation is a common bargaining tool in offers and counters.
Where can I verify the current San Francisco transfer tax rates?
- Check the City and County of San Francisco’s official sources and confirm with your title or escrow officer, who will apply the current schedule to your purchase price.
