San Diego Transfer Tax Canceled: $60,200 Tax Hike Abandoned 2026

Timeline: How the Transfer Tax Proposal Rose and Fell in Three Weeks

The San Diego County transfer tax saga unfolded with remarkable speed between mid-December 2025 and early January 2026:

• September 30, 2025: The Board of Supervisors voted 3-2 to create the Ad Hoc Subcommittee on Sustainable Fiscal Planning, with Supervisors Terra Lawson-Remer, Monica Montgomery Steppe, and Paloma Aguirre voting yes, while Joel Anderson and Jim Desmond opposed. The subcommittee was tasked with developing strategies to maintain county services amid anticipated federal budget cuts.
• December 18, 2025: San Diego County issued a request for quotes seeking a contractor with "vast political knowledge" to lobby Sacramento lawmakers for authority to raise transfer taxes and implement payroll taxes. The request specified that supervisors wanted to raise real estate transfer taxes from $0.55 to $30.55 per $500 in property value—a 55-fold increase.
• December 22, 2025: The deadline for vendors to submit bids for the lobbying contract.
• Late December 2025: Republican Supervisor Jim Desmond publicly denounced the proposal on social media, calling it a "quiet effort" to implement new taxes without transparency.
• January 1, 2026: The contract was originally scheduled to begin.
• January 7, 2026: The county posted a notice canceling the request for quotes. County spokesperson Tammy Glenn said the county wanted to "explore different options."
• January 8, 2026: Voice of San Diego first reported the cancellation.
• January 9, 2026: The San Diego Union-Tribune published detailed coverage of the canceled proposal.

The rapid timeline—from initial request to cancellation in just 20 days—suggests the public and political backlash was swift and substantial enough to derail the effort before it gained significant momentum.

What the Canceled Tax Would Have Cost San Diego Homeowners

The proposed transfer tax increase would have dramatically increased the cost of selling real estate throughout San Diego County. According to the draft contract obtained by media outlets, the tax would have jumped from the current rate of $0.55 per $500 of property value to $30.55 per $500—making it one of the highest transfer tax rates in California.

Here's what homeowners would have paid under the proposed tax structure compared to current rates:

The proposed tax would have applied to all real estate transactions in San Diego County, including single-family homes, condominiums, investment properties, and commercial real estate. Unlike some "mansion tax" proposals that target only high-value properties, this increase would have affected every sale above $100, meaning even modest condos and entry-level homes would face five-figure tax bills.

For context, San Diego County's current transfer tax rate of $1.10 per $1,000 ($0.55 per $500) is already higher than many California counties. The proposed rate of $61.10 per $1,000 would have exceeded even Los Angeles County's controversial Measure ULA "mansion tax," which imposes a 4% tax on properties between $5.3 million and $10.6 million, and 5.5% on properties above $10.6 million.

Why the Proposal Failed: Opposition from Multiple Fronts

The transfer tax lobbying effort collapsed under pressure from three main sources: Republican supervisors, transparency advocates, and real estate industry stakeholders.

Republican Supervisor Opposition

Supervisor Jim Desmond (District 5) emerged as the most vocal opponent of the tax increase. He denounced the proposal on social media in late December, framing it as a lack of transparency and an attempt to circumvent public input. After the cancellation was announced, Desmond issued a statement celebrating the outcome: "This is a win for transparency. Once the quiet effort to raise taxes and add new taxes was brought to light, the right outcome followed."

Desmond's opposition highlighted a key vulnerability in the Democratic supervisors' approach: the request for quotes was posted with minimal public notice during the holiday period, when many residents and stakeholders might not be paying close attention to county business. The timing raised questions about whether supervisors intended to advance the proposal quietly before facing public scrutiny.

Transparency Concerns

Voice of San Diego and other watchdog organizations exposed the proposal before it could gain traction in Sacramento. By reporting on the draft contract and its contents, journalists forced the issue into public view, where it faced immediate criticism. The lack of public hearings, community input sessions, or advance notice to stakeholders became a political liability.

County spokesperson Tammy Glenn's statement that the county was canceling the contract to "explore different options" suggested that supervisors recognized the current approach was politically untenable, at least in its existing form.

Real Estate Industry Reaction

While the San Diego Association of Realtors and other industry groups did not have time to mount a formal opposition campaign before the proposal was canceled, the real estate community expressed significant concern. The proposed tax increase would have fundamentally altered the economics of buying and selling property in San Diego County, potentially reducing transaction volume and affecting property values.

The experience of Los Angeles County following the passage of Measure ULA in November 2022 provided a cautionary tale: high-value property sales fell by approximately 50% over the first two years, and building permits for multifamily projects dropped 60% from 2022 to 2024. Industry stakeholders worried that San Diego would face similar market disruptions if such a tax were implemented.

Terra Lawson-Remer's Ballot Measure Hint: Is the Threat Over?

While the lobbying effort has been canceled, Board Chair Terra Lawson-Remer indicated that the transfer tax concept remains under consideration—but through a different pathway. In statements to the media, Lawson-Remer suggested that any transfer tax increase should be decided by voters, not legislators in Sacramento.

"That's a decision that should be made by local voters, not politicians in Sacramento," Lawson-Remer stated, signaling that a ballot measure targeting high-value properties could still be pursued.

This shift from legislative lobbying to voter approval represents a significant change in strategy. Under California law, counties cannot raise transfer tax rates above the standard $0.55 per $500 without authorization from the state legislature. The canceled lobbying contract would have sought that legislative authority. However, Lawson-Remer's comments suggest that county leadership may instead pursue a voter-approved measure, similar to Los Angeles's Measure ULA.

What a Ballot Measure Would Require

For San Diego County to implement a transfer tax increase through a ballot measure, the process would unfold as follows:

1. Legislative Authorization: The California Legislature would still need to grant San Diego County the authority to exceed standard transfer tax rates, even if the increase is voter-approved. This is because Proposition 13 (1978) restricts local governments' taxing authority.
2. Board of Supervisors Approval: The Board would need to vote to place the measure on the ballot. This requires a simple majority (3 of 5 supervisors).
3. Voter Approval: Depending on how the measure is structured, it would require either a simple majority (50%+1) for a general tax or a two-thirds supermajority (66.67%) for a special tax designated for specific purposes. A supervisor-backed ballot measure would likely require two-thirds voter approval, while a citizen-led initiative would need only a simple majority.

The November 2026 ballot presents the next realistic opportunity for such a measure, though the county would need to move quickly to meet ballot qualification deadlines, which typically fall in July or August for November elections.

Lessons from Los Angeles's Measure ULA

Any future San Diego transfer tax ballot measure would likely draw comparisons to Los Angeles's Measure ULA, passed by voters in November 2022 and implemented in April 2023. That measure imposes a 4% tax on property sales between $5.3 million and $10.6 million, and 5.5% on sales above $10.6 million (with thresholds adjusted annually for inflation).

While Measure ULA has raised substantial revenue—approximately $830 million through early 2026—it has also faced significant challenges. The measure is currently subject to a legal challenge backed by the Howard Jarvis Taxpayers Association, which argues that it violates Proposition 13's restrictions on local transfer taxes. In October 2024, a similar "Empty Homes Tax" in San Francisco was struck down by courts, raising questions about the legal viability of aggressive transfer tax measures.

Additionally, Measure ULA's impact on Los Angeles's real estate market has been substantial. High-value property transactions fell sharply following implementation, with many sellers choosing to hold properties rather than pay the tax, or completing sales just under the threshold to avoid it. This market distortion could serve as either a cautionary tale or a feature, depending on whether policymakers view reduced transaction volume as a problem or as evidence that the tax successfully targets speculative investment.

Current Transfer Tax Landscape in San Diego County

To understand the context of the proposed increase, it's important to know how transfer taxes currently work in San Diego County and how they compare to other California jurisdictions.

Current San Diego County Transfer Tax

San Diego County currently imposes a documentary transfer tax of $0.55 per $500 of property value ($1.10 per $1,000). This tax is paid at the close of escrow and is typically negotiated between buyer and seller, though custom in San Diego County is for the seller to pay it.

For a typical transaction, the math looks like this:

• Home sale price: $985,000
• Tax calculation: $985,000 ÷ $500 = 1,970 increments
• Transfer tax: 1,970 × $0.55 = $1,083.50

This is a relatively modest transaction cost compared to other expenses like real estate commissions (typically 5-6% of sale price) or loan origination fees for buyers using financing.

California Transfer Tax Comparison

Transfer tax rates vary significantly across California counties and cities:

San Diego County's current rate is at the statewide standard of $1.10 per $1,000. The proposed increase to $61.10 per $1,000 would have made it the highest transfer tax rate in California, exceeding even Berkeley's aggressive tiered structure.

What Homeowners Who Delayed Selling Should Do Now

Many San Diego County homeowners who learned about the proposed transfer tax in late December may have delayed listing their properties, hoping to avoid the massive tax increase. With the proposal now canceled, these homeowners face a new decision: should they proceed with selling, or does the possibility of a future ballot measure warrant continued caution?

Immediate Market Conditions Favor Sellers

The San Diego real estate market in early 2026 presents generally favorable conditions for sellers who need or want to move:

• Steady appreciation: Forecasts predict 2-4% home price appreciation through 2026, supported by continued inventory constraints and steady demand.
• Spring market approaching: The traditional peak selling season (March through June) is just weeks away, offering maximum buyer activity and competitive pressure that drives prices up.
• Mortgage rates moderating: Rates are expected to fluctuate between 5.5% and 6.5% through 2026, with many forecasters predicting movement toward 6% or below by Q4 2026. Lower rates increase buyer purchasing power and expand the pool of qualified buyers.
• Balanced market dynamics: Unlike the extreme seller's market of 2021-2022, the current market is more balanced, with homes selling in 37-49 days countywide. This provides sellers with realistic timelines and pricing expectations.

For homeowners whose selling decision was motivated by factors other than tax avoidance—such as relocation, downsizing, inheritance situations, or financial need—the cancellation of the transfer tax proposal removes a major obstacle. Current transfer tax rates of approximately $1,100 on a million-dollar home are manageable within the context of overall transaction costs.

Assessing Future Ballot Measure Risk

Homeowners concerned about a potential future ballot measure should consider several factors:

Timeline considerations: The earliest a ballot measure could realistically appear is November 2026, which is 10 months away. Even if county supervisors moved forward with a ballot measure immediately, they would need to secure legislative authorization from Sacramento, draft the measure, qualify it for the ballot (with deadlines typically in July-August), and campaign for voter approval. This process would take most of 2026.

Voter approval is uncertain: Unlike the legislative lobbying approach (which, if successful, would not require voter approval), a ballot measure must win at the polls. Polling data from late 2025 showed mixed public sentiment on tax increases, even when framed as targeting only high-value properties. Homeowners should not assume that a transfer tax ballot measure would automatically pass.

Likely targeted at high-value properties: Lawson-Remer's public comments have consistently referenced taxing "mansions worth five or ten million dollars or more," suggesting any future ballot measure would likely target luxury properties rather than median-priced homes. Homeowners with properties valued under $3-5 million may face minimal risk even if a ballot measure passes.

Legal uncertainty: Transfer tax measures face legal challenges under Proposition 13 and other California tax limitation laws. San Francisco's Empty Homes Tax was struck down in October 2024, and Los Angeles's Measure ULA faces ongoing legal challenges. Even if a San Diego measure passed, it might not survive judicial review.

Strategic Recommendations by Homeowner Type

High-value property owners ($3M+): If you were planning to sell and the only factor stopping you was the proposed transfer tax, consider listing in spring 2026. You have at least 10 months before any ballot measure could be implemented, and likely longer given legislative and legal timelines. Waiting indefinitely for policy certainty may mean missing favorable market conditions.

Median-priced homeowners ($700K-$1.5M): You face minimal risk from a targeted "mansion tax" ballot measure. Make your selling decision based on your personal circumstances, market conditions, and property-specific factors rather than tax policy speculation.

Investors and cash buyers: Current transfer tax rates make San Diego County competitive for investment property transactions. With the legislative lobbying threat eliminated, transaction costs remain predictable. Focus on property fundamentals, cash flow analysis, and market timing rather than tax policy.

Homeowners facing financial pressure: If you need to sell due to financial hardship, inheritance settlement, divorce, or other pressing circumstances, don't let speculation about future tax policy delay your decision. The current transfer tax ($1,000-$1,500 for most homes) is manageable, and the timeline for any future increase is measured in years, not months.

How Cash Buyers Can Help Homeowners Navigate Uncertainty

Even with the immediate transfer tax threat eliminated, many San Diego homeowners face situations where a quick, certain sale provides significant advantages over a traditional listing:

Speed Eliminates Policy Risk

Cash buyers can typically close transactions in 7-14 days, compared to 30-60 days for traditional financed sales. This speed matters when policy uncertainty exists. If county supervisors decide to pursue a ballot measure for November 2026, homeowners who close sales in early 2026 will have completed their transactions well before any voter decision occurs.

Additionally, the 60-day difference between a cash sale (closing in early February) and a traditional sale (closing in late March or early April) could be significant if unexpected policy developments occur. While the canceled lobbying contract suggests transfer tax changes won't happen through legislative action, political dynamics can shift quickly.

Certainty in a Changing Market

Cash offers eliminate financing contingencies, which means sellers face virtually zero risk of the sale falling through due to buyer loan denial, appraisal issues, or changing interest rates. In a market where mortgage rates remain volatile and economic uncertainty persists, this certainty has tangible value.

For homeowners concerned about potential market downturns, policy changes, or personal financial timelines, a cash offer provides a guaranteed outcome. You know exactly when you'll close, how much you'll receive, and that the transaction won't be derailed by financing problems.

Avoiding Traditional Sale Costs and Delays

While transfer taxes apply equally to cash and financed sales, other transaction costs differ significantly. Cash sales typically involve:

• No buyer financing delays: No waiting for loan approval, underwriting, or appraisal contingencies
• Reduced repair negotiations: Cash buyers often purchase properties as-is, eliminating the need for pre-sale repairs, staging, or improvements
• Lower agent commissions (sometimes): Some cash buyers are direct purchasers who don't charge seller-side commissions, though many work through agents with traditional commission structures
• Fewer showing disruptions: Instead of weeks of open houses and showings, cash sales often involve a single property visit
• Flexible closing dates: Cash buyers can often accommodate sellers' preferred timelines, whether that means closing quickly or allowing extended possession after closing

These advantages matter most for homeowners who value speed, certainty, and convenience over achieving the absolute maximum sale price.

Who Benefits Most from Cash Sales

Cash buyers serve specific homeowner needs particularly well:

• Inherited properties: Heirs who want to liquidate real estate quickly without managing repairs, listings, or extended sales processes
• Financial distress: Homeowners facing foreclosure, short sale situations, or urgent need for liquidity
• Out-of-area owners: Property owners who have relocated and don't want to manage a traditional sale from a distance
• Difficult properties: Homes needing major repairs, dealing with title issues, or located in less desirable areas where traditional buyers are scarce
• Divorce or estate settlements: Situations where multiple parties want a quick, clean resolution without the complexity of a traditional sale
• Relocation urgency: Homeowners who have already moved for work and need to close on their San Diego property quickly

For homeowners in these situations, the transfer tax cancellation doesn't change the fundamental value proposition of a cash sale. The benefits of speed, certainty, and convenience remain compelling regardless of tax policy.

Political Context: Why County Supervisors Pursued the Tax Increase

Understanding why San Diego County supervisors initially pursued the transfer tax increase provides context for assessing whether future attempts are likely.

Federal Budget Uncertainty

The Ad Hoc Subcommittee on Sustainable Fiscal Planning was created in September 2025 specifically to address anticipated federal budget cuts affecting county services. Supervisors projected that reduced federal funding for health and human services, public safety, and infrastructure programs would create significant budget shortfalls.

Supervisor Monica Montgomery Steppe framed the fiscal challenge in moral terms: "A budget is a moral document, and when we cut lifelines to the vulnerable, we bankrupt the compassion that defines public service." This rhetoric suggests that Democratic supervisors view new revenue sources as necessary to maintain services to vulnerable populations rather than as optional policy preferences.

Proposition 13 Constraints

California's Proposition 13, passed by voters in 1978, severely limits local governments' ability to raise property taxes. Property tax rates are capped at 1% of assessed value, with assessed values capped at 2% annual increases until the property is sold. This means that even as property values have soared in San Diego County—with median home prices rising from approximately $350,000 in 2000 to over $1 million in 2026—property tax revenue has not kept pace.

Local governments seeking new revenue must therefore look to alternative sources, such as sales taxes, special assessments, parcel taxes, and transfer taxes. The county's exploration of a transfer tax increase reflects this limited menu of options.

Los Angeles's Measure ULA Precedent

Los Angeles voters' approval of Measure ULA in November 2022, which has generated approximately $830 million in revenue since April 2023, likely encouraged San Diego County supervisors to view transfer taxes as a viable revenue source. If Los Angeles voters were willing to approve a 4-5.5% transfer tax on high-value properties to fund affordable housing and homelessness programs, perhaps San Diego voters would support a similar measure.

However, the Los Angeles example also illustrates the political risks. Measure ULA passed with just 57.8% voter approval—a comfortable margin, but not overwhelming. And its implementation has generated ongoing controversy, legal challenges, and market distortions that have drawn criticism from real estate industry stakeholders and some economists.

Competing Revenue Proposals

The canceled transfer tax lobbying effort was not the only tax proposal under consideration. In January 2026, the county awarded a $320,000 contract to political consultants and pollsters to research potential ballot measures, including a possible half-cent sales tax increase. Labor unions are also pursuing a citizen-led initiative for a countywide sales tax increase on the November 2026 ballot.

These parallel efforts suggest that county leadership views new revenue as necessary and is exploring multiple pathways to achieve it. The transfer tax approach may have been abandoned not because supervisors gave up on raising revenue, but because they concluded that a sales tax measure or targeted high-value property tax would have better political prospects.

Frequently Asked Questions

Conclusion: Knowledge Creates Opportunity

The cancellation of San Diego County's proposed 5,500% transfer tax increase represents a significant victory for transparency and homeowner advocates. The $60,200 tax that would have applied to the average home sale has been eliminated, at least through the legislative lobbying pathway that county supervisors initially pursued.

However, the underlying fiscal pressures that motivated the proposal haven't disappeared. San Diego County supervisors face legitimate budget challenges from anticipated federal funding cuts, and Proposition 13's constraints on property tax revenue limit their options for addressing shortfalls. Board Chair Terra Lawson-Remer's comments about letting "local voters" decide on transfer taxes suggest that a ballot measure targeting high-value properties remains under consideration.

For San Diego County homeowners, the current situation calls for informed vigilance rather than panic. The immediate threat has been eliminated, and any future transfer tax increase would require voter approval, legislative authorization, and the ability to survive legal challenges. Homeowners with median-priced properties face minimal risk even from a targeted "mansion tax" approach, while luxury property owners have at least 10 months before any ballot measure could be implemented.

Your selling decision should be based on your personal circumstances, current market conditions, and property-specific factors. The San Diego real estate market in early 2026 offers balanced conditions with steady appreciation, moderating mortgage rates, and the upcoming spring peak season. Whether you choose a traditional listing to maximize sale price or a cash sale to prioritize speed and certainty, the cancellation of the transfer tax proposal means you can plan your transaction with confidence in predictable tax costs.

If you're considering selling and value certainty, speed, and convenience, San Diego Fast Cash Home Buyer can provide a no-obligation cash offer within 24 hours and close in as few as 7 days. Even with the transfer tax threat eliminated, many homeowners find that cash sales offer compelling advantages for their specific situations—from inherited properties to relocation urgency to avoiding the complexity of traditional listings. Contact us today to learn how a cash sale could work for your San Diego County property.

Related Articles