San Diego Measure A: What the June 2026 Empty Homes Tax Means for Second Home Owners in Coastal Neighborhoods

What Is San Diego Measure A?

Measure A, officially titled the "Non-Primary Homes Tax," would create an annual tax on homes in the City of San Diego that are not claimed as someone's primary residence and are unoccupied for 183 days or more per calendar year. The San Diego City Council voted 8-1 in March 2026 to place the measure on the June ballot, making it one of the most significant housing policy decisions in the city's recent history.

The measure is designed to accomplish two primary goals:

• Generate revenue for city services: The Office of the Independent Budget Analyst projects the tax could generate between $9.2 million and $21.4 million in its first year, with estimates ranging from $10.5 million to $24.3 million in the second year.
• Encourage housing availability: Supporters argue the tax will incentivize owners to either rent their vacant properties to long-term residents or sell them, thereby increasing housing supply in a city facing an affordability crisis.

Council member Sean Elo-Rivera, who introduced the measure, emphasized that it targets a small fraction of San Diego's housing stock—less than 1% of all properties citywide—while potentially providing meaningful relief to the city's budget deficit and housing shortage.

Tax Amounts and Payment Structure

If voters approve Measure A, affected property owners will face the following tax schedule:

Key Payment Details:

• Effective Date: January 1, 2027
• First Payment Due: April 1, 2028 (for the 2027 calendar year)
• Late Payment Penalty: 10% of the tax amount
• Fraud Penalty: Double the tax amount for intentional misrepresentation
• Inflation Adjustment: Beginning in 2029, both the base tax and corporate surcharge will be adjusted annually for inflation

For corporate-owned vacant properties—including those held by LLCs, trusts, or investment entities—the combined tax burden could reach $15,000 annually beginning in 2028, with automatic inflation increases thereafter. Over a 10-year period, this could represent a cumulative tax liability exceeding $170,000 for a single vacant property.

The 183-Day Vacancy Threshold: What Counts as Vacant?

The centerpiece of Measure A is its 183-day vacancy requirement. A property is subject to the tax if it meets both of the following criteria:

1. It is not the owner's primary residence (not claimed for homeowner's exemption)
2. It is unoccupied for more than 182 days during the calendar year

What Counts as Occupied?

According to the measure's language, a property is considered occupied when someone is physically present in the home. This includes:

• Owner stays and visits
• Long-term rental to tenants (30+ days)
• Short-term vacation rentals (Airbnb, VRBO)
• Family members or guests staying with permission

Documentation Requirements:

Property owners will need to demonstrate occupancy through documentation such as:

• Utility bills showing consistent usage
• Rental agreements and lease contracts
• Guest registrations for short-term rentals
• Credit card statements showing local purchases
• Calendar records of property usage

The burden of proof falls on the property owner. If you cannot document at least 183 days of occupancy during a calendar year, your property may be subject to the tax. This creates a significant compliance burden, especially for vacation home owners who use their properties sporadically throughout the year.

Geographic Impact: Coastal Neighborhoods Hit Hardest

While Measure A applies citywide, its impact is concentrated in San Diego's most desirable coastal communities. According to city estimates, nearly half (45%) of the 5,140 affected properties are located in downtown, La Jolla, Pacific Beach, Point Loma, and surrounding coastal areas.

Coastal Neighborhoods Most Affected:

These coastal areas are attractive to second home buyers for several reasons:

• Premium ocean access: Direct beach access and ocean views command the highest property values in San Diego
• Vacation appeal: Proximity to restaurants, entertainment, and outdoor activities makes these ideal vacation destinations
• Investment returns: High rental demand and property appreciation historically provide strong ROI
• Lifestyle amenities: Boardwalks, surf culture, boutique shopping, and waterfront dining

However, these same characteristics make coastal properties more likely to sit vacant for extended periods, particularly when owners live out of state or abroad and visit only during peak seasons.

Who Qualifies for Exemptions?

Measure A includes several exemptions designed to protect property owners facing circumstances beyond their control. However, owners must actively apply for these exemptions—they are not granted automatically.

Qualifying Exemptions Include:

• Multi-unit properties with owner occupancy: Properties with four or fewer units where the owner occupies one unit for most of the year
• Natural disaster or catastrophic event: Properties uninhabitable due to fire, flood, earthquake, or other disasters (up to 2 years)
• Newly constructed homes: Properties actively marketed for sale or rent (up to 2 years from completion)
• Death of owner: Properties vacant due to owner passing and estate settlement in process
• Care facility placement: Properties vacant because the owner moved into a nursing home, assisted living, or long-term care facility
• Military deployment: Properties vacant due to active duty military service, deployment, or relocation orders

Important Limitations:

Critics of Measure A have pointed out that several common situations do NOT qualify for exemptions:

• Properties being renovated or remodeled (unless uninhabitable due to disaster)
• Properties held for long-term investment appreciation
• Vacation homes used regularly but less than 183 days per year
• Properties in probate or complex estate situations (after initial exemption period)
• Second homes purchased for retirement but not yet occupied full-time

Additionally, the application process for exemptions creates administrative burden. Property owners must submit documentation, track their exemption status annually, and potentially appeal if exemptions are denied. For out-of-state or international owners, this compliance requirement adds complexity and cost.

Arguments For and Against Measure A

Measure A has generated passionate debate among San Diego residents, policymakers, and property rights advocates. Understanding both perspectives is essential for property owners making decisions about their second homes.

Arguments in Favor (Supporters):

• Revenue for critical services: The projected $9.2 million to $24.3 million annually could protect police, fire, parks, libraries, and infrastructure during budget shortfalls
• Housing availability: Encouraging owners to rent or sell vacant properties could add hundreds of units to the rental market, easing the housing crisis
• Fairness principle: Property owners benefiting from San Diego's desirable location should contribute to city services or make their homes available to residents who need housing
• Minimal impact: The tax affects less than 1% of San Diego's housing stock, targeting only those who can afford to keep expensive properties vacant
• Behavioral incentive: Even if owners don't sell, converting vacant homes to rentals increases housing supply and affordability

Arguments Against (Opponents):

• Constitutional concerns: The California Apartment Association warns the measure "closely mirrors San Francisco's Proposition M vacancy tax," which a trial court ruled unconstitutional and conflicted with the Ellis Act
• Property rights violation: Opponents argue the tax infringes on fundamental rights to own and use property without government interference
• Privacy concerns: Tracking and documenting 183 days of occupancy requires invasive monitoring of personal property use
• Administrative burden: Even exempt owners must apply for exemptions, creating paperwork and compliance costs
• General tax concerns: As a general tax with no specific spending plan, revenue could be used for any purpose, not necessarily housing or affordability programs
• Market disruption: A sudden influx of coastal properties for sale could depress property values, hurting all homeowners in affected neighborhoods

The legal challenges are particularly noteworthy. San Francisco's similar vacancy tax was struck down in court, creating precedent that could affect San Diego's measure if approved. Property owners considering their options should monitor potential litigation that could invalidate the tax even after voter approval.

Timeline: Critical Dates for Property Owners

For second home owners evaluating their options, timing is everything. Here are the critical dates to know:

Key Strategic Consideration:

If Measure A passes on June 2, property owners will have approximately 7 months (June-December 2026) to make critical decisions:

1. Sell before January 1, 2027: Avoid the tax entirely by completing the sale before the effective date
2. Convert to long-term rental: Find tenants to occupy the property for 183+ days annually
3. Increase personal use: Commit to using the property as a primary residence or for 183+ days per year
4. Apply for exemption: If eligible, submit documentation for qualifying exemptions
5. Accept the tax: Factor the $8,000-$15,000 annual cost into ownership calculations

For many coastal property owners—particularly those with corporate-owned investment properties facing the $12,000-$15,000 combined tax—selling before the January 1, 2027 deadline may be the most financially prudent option.

Financial Impact Analysis: Is It Worth Keeping Your Second Home?

For property owners considering whether to sell or retain their vacant second homes, a detailed financial analysis is essential. Let's examine the true cost of ownership under Measure A.

10-Year Cost Projection (Standard Tax):

10-Year Cost Projection (Corporate-Owned):

Additional Ownership Costs to Consider:

• Property taxes: San Diego County average 1.1-1.3% of assessed value annually
• HOA fees: Coastal condos often charge $300-$800/month ($3,600-$9,600/year)
• Insurance: Coastal properties require higher premiums, often $2,000-$5,000/year
• Maintenance: Vacant properties still require landscaping, utilities, pest control, and repairs
• Opportunity cost: Capital tied up in vacant property could be invested elsewhere

Example: La Jolla Ocean-View Condo

Consider a $1.2 million La Jolla condo owned through an LLC and vacant 200+ days per year:

• Annual property taxes: $13,200 (1.1% of value)
• HOA fees: $6,000
• Insurance: $3,500
• Measure A tax (corporate): $15,000 (2028 onward)
• Total annual carrying cost: $37,700
• 10-year total cost: $377,000

For this owner, selling the property before January 1, 2027 would eliminate $153,000 in Measure A taxes over the next decade, plus avoid the ongoing carrying costs. The capital could be reinvested in assets with better returns or lower maintenance burdens.

Options for Second Home Owners

If Measure A passes, vacant second home owners in San Diego have several strategic options. Each comes with distinct advantages, challenges, and financial implications.

Option 1: Sell Before the Tax Takes Effect

Advantages:

• Avoid Measure A tax entirely by closing before January 1, 2027
• Capitalize on current coastal property values before potential market influx of similar properties
• Eliminate all ongoing carrying costs (property tax, HOA, insurance, maintenance)
• Redeploy capital into higher-yield investments or simpler assets
• Avoid administrative burden of tracking occupancy and compliance

Challenges:

• Capital gains tax on appreciated properties (though 1031 exchange may defer)
• Emotional attachment to vacation home or family property
• Loss of future appreciation potential
• Compressed timeline (6-7 months) may create urgency pricing

Best for: Corporate/LLC owners facing $12,000-$15,000 annual tax; owners with multiple properties; investors prioritizing liquidity; owners who rarely use the property

Option 2: Convert to Long-Term Rental

Advantages:

• Generate rental income to offset carrying costs and tax exposure
• Maintain property ownership and appreciation potential
• Tenants provide 183+ days of occupancy, avoiding Measure A tax
• Coastal properties command premium rents ($3,000-$8,000+/month depending on location and size)

Challenges:

• Lose personal use of the property for vacations and family visits
• Landlord responsibilities: maintenance, tenant management, repairs, compliance
• Rental income subject to state and federal taxes
• Tenant turnover risk could create vacancy periods subject to tax
• Wear and tear on property from tenant occupancy

Best for: Owners seeking income; properties in high-demand rental areas; owners comfortable with landlord responsibilities; those with property management support

Option 3: Increase Personal Use to 183+ Days

Advantages:

• Avoid tax while maintaining full control and personal use
• Enjoy the lifestyle benefits of coastal living
• No tenants, no rental management, no loss of privacy
• Property remains available for family and guests

Challenges:

• Requires 6+ months per year in San Diego (may conflict with primary residence elsewhere)
• Must document occupancy with utility bills, receipts, calendar records
• Difficult for out-of-state or international owners
• May trigger changes to state income tax if California residency is established

Best for: Retirees; remote workers with location flexibility; owners considering San Diego as future primary residence

Option 4: Accept the Tax and Keep the Property Vacant

Advantages:

• Maintain complete flexibility for personal use
• No tenants, no documentation burden beyond paying the tax
• Preserve property for long-term appreciation or future use
• Simplicity—just pay the annual bill

Challenges:

• $8,000-$15,000 annual recurring tax (plus inflation adjustments)
• $100,000-$150,000+ cumulative cost over 10 years
• Funds spent on tax cannot be invested elsewhere
• No guarantee tax won't increase or exemptions won't narrow over time

Best for: High net worth owners; properties with exceptional location/sentimental value; owners expecting significant appreciation; those planning future primary residence conversion

How Cash Home Buyers Can Help Navigate Measure A

For property owners who decide that selling before the January 1, 2027 tax effective date is the best option, timing and speed are critical. Traditional real estate transactions typically take 30-60 days from listing to closing, but cash home buyers offer a dramatically faster alternative.

Advantages of Cash Sale for Measure A Situations:

1. Rapid Closing Timeline (7-14 Days)

Cash buyers can move from property walkthrough to offer within hours and close escrow in as few as 7 to 14 days. This speed is invaluable for owners making last-minute decisions after the June 2 vote or facing year-end deadlines to avoid the 2027 tax.

2. As-Is Purchase (No Repairs Required)

Vacant second homes often have deferred maintenance issues—landscaping neglect, outdated interiors, minor repairs. Cash buyers purchase properties in current condition, eliminating the time and expense of pre-sale renovations that could delay closing past critical deadlines.

3. Certainty of Closing

Traditional buyers often face financing contingencies, appraisal issues, or last-minute loan denials. Cash transactions remove these risks, providing certainty that the sale will close on schedule—essential when avoiding a tax deadline.

4. Simplified Process for Out-of-State/International Owners

Many vacant second home owners live outside California or abroad. Cash buyers can handle closing documents remotely, coordinate with title companies for wire transfers, and manage the entire process without requiring the owner to travel to San Diego.

5. Flexible Timing

Some owners need to close before December 31, 2026 to avoid the tax, while others may want to delay closing into early 2027 for tax planning reasons. Cash buyers often accommodate seller timing preferences more readily than traditional buyers with financing deadlines.

Example Scenario: Pacific Beach Vacation Condo

Maria owns a 2-bedroom Pacific Beach condo through an LLC. She uses it 40-50 days per year and keeps it vacant otherwise. If Measure A passes:

• Her LLC would face $12,000 in 2027, $15,000 annually thereafter
• She doesn't want to become a landlord or track occupancy documentation
• On June 5, she decides to sell before January 1, 2027

With a cash buyer:

• June 6: Initial contact and property information provided
• June 8: Cash offer received based on current market comparables
• June 12: Offer accepted, escrow opened
• June 22: Closing completed, funds wired to Maria

Total timeline: 16 days from decision to closed sale. Maria avoids all Measure A taxes, eliminates ongoing HOA and carrying costs, and redeploys her capital into other investments.

Who Should Consider a Cash Sale?

• Corporate or LLC owners facing the $12,000-$15,000 combined tax
• Owners with multiple properties looking to simplify their portfolio
• Out-of-state or international owners unable to manage long-distance rentals
• Properties needing significant repairs that would delay traditional listings
• Owners who waited until late 2026 and need to close before December 31
• Anyone prioritizing speed, certainty, and simplicity over maximizing sale price

What Happens After the June 2 Vote?

The outcome of the June 2, 2026 ballot will determine next steps for thousands of San Diego second home owners. Here's what to expect in each scenario:

If Measure A Passes:

1. Immediate: Results certified within 1-2 weeks; measure becomes law effective January 1, 2027
2. Summer 2026: City begins developing implementation procedures, tracking systems, and exemption application processes
3. Fall 2026: Likely surge in coastal property listings as owners decide to sell before the deadline
4. December 2026: Final month to close sales and avoid Year 1 tax exposure
5. January 2027: Tax takes effect; 2027 becomes the first tax year for vacancy tracking
6. Early 2028: City issues first tax bills for 2027 vacancy (due April 2028)
7. Legal challenges: Expect lawsuits challenging the measure's constitutionality, potentially delaying or invalidating implementation

If Measure A Fails:

• No tax imposed; second home owners can continue current usage patterns
• Housing advocates may propose alternative measures or pursue state-level legislation
• Property values in coastal areas may stabilize or increase without the tax overhang
• Owners who prepared to sell may reconsider their options

Market Implications Either Way:

Real estate analysts anticipate potential market volatility in San Diego's coastal neighborhoods regardless of the vote outcome. If Measure A passes, a wave of properties could hit the market in late 2026, potentially creating buying opportunities for cash investors and primary residence purchasers. If it fails, pent-up demand could drive coastal prices higher as uncertainty resolves.

Frequently Asked Questions