Mayor Daniel Lurie and Supervisor Bilal Mahmood have introduced the Balanced Update to Incentivize Local Development (BUILD) Act to restore San Francisco’s development feasibility by rolling back the 2020 transfer tax increases (Proposition I). This reform is being advanced as a legislative ordinance rather than a ballot measure, utilizing new authority granted to the Board of Supervisors by voters in 2024. Although a loophole closing ballot measure is being proposed.
Transfer Tax Changes
Unlike the tax hikes of 2020, which required voter approval, the BUILD Act will be enacted via legislation at the Board of Supervisors. This is possible due to Proposition C (March 2024), which amended the City Charter to allow the Board to decrease or repeal transfer taxes without returning to the ballot. The legislation targets high-value multifamily and commercial transactions to bridge the "feasibility gap" currently stalling 50,000 entitled units.
● $10 Million to <$25 Million: Rate reduced from 5.75% back to 2.75%.
● $25 Million and Above: Rate reduced from 6.00% back to 3.00%.
● No changes are proposed for single-family residences or transactions under $10 million.
● This would be effective after 12AM on July 1, 2026
The Board of Supervisors will need to approve this legislation. The Budget and Finance Committee (Chair Connie Chan, Vice Chair Matt Dorsey, and Member Danny Sauter) will first consider the legislation before sending it to the Full Board of Supervisors who, based on Board Policies, are required to hear the item at two separate meetings. The Mayor would then have ten days to sign it. Please see a timeline on the following page.
Political Support
The measure is backed by the SF Building and Construction Trades Council, Laborers Local 261, the North Coast States Carpenters Union, and the SF Chamber of Commerce. Additionally, Assessor-Recorder Juaquin Torres has announced his support for the measure, as has the Housing Action Coalition.
Closing the Foreclosure Loophole
To ensure revenue neutrality for the General Fund, the administration is pairing the legislative rate cuts with a November 2026 ballot measure. This measure aims to eliminate the current transfer tax exemption for foreclosures and "deeds in lieu" of foreclosure. While new construction has stalled, there has been a dramatic increase in high-value commercial foreclosures that currently contribute zero to the transfer tax base. This would need a campaign ahead of the election and be passed with 50%+1 of voter approval.
Legislative Timeline
