San Diego Real Estate Transfer Tax Could Jump 5,500% - $46,000 Tax on $750K Home Sale

Understanding the Proposed Transfer Tax Increase

California's Revenue and Taxation Code currently authorizes counties to impose a documentary transfer tax at the rate of $0.55 for each $500 (or $1.10 per $1,000) of property value transferred. San Diego County, like most California counties, has maintained this baseline rate for decades.

The proposed increase would raise San Diego County's transfer tax to $30.55 per $500 in property value, according to a draft contract in a request for proposals from lobbyists. This represents one of the most aggressive transfer tax proposals in California history.

County Supervisor Terra Lawson-Remer has championed the measure, proposing what she describes as "a one-time small transfer fee on the sales of the top 1% of the county's properties" to fund affordable housing and homelessness programs. During her State of the County address in April 2025, Lawson-Remer stated that "Those with homes in the top 1% can pay for just a small share of that fortunate windfall when their property is sold to help break the stranglehold of our housing crisis."

However, critics note that the tax would apply far more broadly than just luxury properties. With San Diego's median home price hovering around $990,000 to $1,050,000 as of late 2025, many middle-class homeowners in neighborhoods like North Park, South Park, Hillcrest, and Clairemont would face substantial tax bills.

The proposal requires state legislative approval before it can appear on a county ballot, as it exceeds the standard transfer tax rate authorized under current California law. The county has reportedly sought lobbyists to help secure this authorization from Sacramento.

Breaking Down the Financial Impact by Home Value

The proposed transfer tax would dramatically increase the cost of selling a home in San Diego County. Here's how the numbers break down across different price points:

For homeowners in La Jolla and Point Loma, where median prices exceed $2 million, the tax could represent more than $120,000 in additional closing costs. Even in more affordable areas like Tierrasanta, City Heights, and Allied Gardens, where homes typically sell for $600,000 to $800,000, sellers would face $30,000 to $50,000 in unexpected taxes.

Steve Schneider, a Tierrasanta homeowner quoted in the San Diego Union-Tribune, captured the frustration many residents feel: "On what planet would a nearly 5,500% increase in sales tax make sense?" He criticized ballot measures backed by public employee unions as representing "self-interests" and "a shell game to get more money for programs so money is freed up for union raises."

These amounts represent real equity that homeowners have built over years or decades—equity that could vanish overnight if the measure passes.

The Political Timeline: When Could This Tax Take Effect?

Understanding the timeline for this potential tax increase is critical for homeowners making selling decisions. Here's what we know about the political process:

Current Status (January 2026): The proposal is in the lobbying phase, with San Diego County seeking state legislative approval to exceed the standard transfer tax rate. According to public records from late December 2025, the county issued a request for proposals to hire lobbyists specifically for this purpose.

State Legislative Session (2026): The county needs authorization from the California Legislature to impose a transfer tax higher than the standard $0.55 per $500 rate. This would likely require a bill to be introduced, debated, and passed during the 2026 legislative session, which runs from January through August.

Ballot Placement (November 2026): If the Legislature grants authorization, the measure could appear on the November 2026 general election ballot. County measures require approval by the Board of Supervisors to be placed on the ballot, typically by an August deadline.

Implementation (2027): If voters approve the measure in November 2026, it would likely take effect sometime in 2027, following a standard implementation period for new tax policies.

However, this timeline contains significant uncertainty. The Howard Jarvis Taxpayers Association is simultaneously pursuing a November 2026 ballot initiative called the "Local Taxpayer Protection Act to Save Prop 13," which would prohibit cities and counties from imposing real estate transfer taxes beyond the 0.11% cap set by Proposition 13. If both measures qualify for the same ballot and both pass, legal battles could ensue.

For homeowners planning to sell, this uncertainty creates a compelling case for acting sooner rather than later. Waiting to see the political outcome means risking exposure to a tax that could cost $40,000 to $60,000 or more.

Lessons from Los Angeles: The Measure ULA Warning

San Diego's proposed transfer tax closely mirrors Los Angeles' Measure ULA, commonly known as the "mansion tax," which passed in 2022 and provides a cautionary tale about unintended consequences.

Measure ULA imposed a 4% tax on property sales between $5 million and $10 million, and 5.5% on sales above $10 million. Proponents estimated it would generate $600 million to $1.1 billion annually for affordable housing. The reality has been dramatically different.

According to UCLA Lewis Center research, Measure ULA has raised roughly $480 million through December 2024—averaging just $288 million per year, less than half the lowest projections. Through its first 26 months, the tax brought in only $725 million, barely 60% of the minimum estimated revenue promised to voters.

More significantly, the tax devastated Los Angeles' real estate market:

• High-value property sales fell by approximately 50% over the first two years
• Building permits for multifamily projects dropped 60% from 2022 to 2024
• The city lost an estimated $25 million in annual property tax revenue due to decreased sales volume
• Conservatively, the tax has cost the city more than 1,900 new housing units annually

For every dollar raised by Measure ULA, the Los Angeles region could lose up to $1.38 in future property tax revenue, according to RAND Corporation analysis. The tax created perverse incentives, with sellers timing transactions to avoid the tax and projects being cancelled or relocated to neighboring cities.

San Diego homeowners considering their options should study Los Angeles' experience carefully. While the stated goal of funding affordable housing is laudable, the practical effect has been to reduce housing supply, decrease tax revenue, and punish homeowners who need to sell.

Vista Mayor John Franklin voiced opposition to San Diego's proposal, calling it "an outrageous proposal to say we're going to raise a billion dollars in new taxes, massively expand government without even having a specific scope and plan for how we're going to spend that money."

The Urgency Window: Why Selling Now Protects Your Equity

For San Diego homeowners who have been considering selling within the next 12 to 24 months, the proposed transfer tax creates an urgent decision point. The financial mathematics are straightforward: every month you wait increases the risk of losing $40,000 to $60,000 or more of your home equity to this new tax.

Consider these common scenarios:

Pre-Retirees Planning to Downsize: If you own a $1.2 million home in University Heights or Normal Heights and plan to downsize in the next year or two, waiting could cost you $72,000 in transfer taxes. That's significant retirement capital—enough to fund years of travel or supplement Social Security benefits.

Inherited Property Owners: Many San Diego residents have inherited properties from parents or relatives. If you're holding an inherited home in Mission Valley or Bay Park while deciding whether to sell or rent, the proposed tax makes the decision more urgent. A $900,000 inherited property would incur a $54,000 tax—money that would otherwise go to you and your siblings. Learn more about selling inherited property in San Diego.

Homeowners Considering Relocation: Whether you're moving for work, to be closer to family, or to a more affordable area, the transfer tax could consume a substantial portion of your relocation budget. The difference between an $800 tax and a $46,000 tax on a $750,000 home sale is the difference between a comfortable move and a financial setback.

Investors and Landlords: Investment property owners evaluating whether to hold or sell face particularly difficult calculations. If the measure passes, selling will become dramatically more expensive, potentially trapping capital in properties you'd prefer to liquidate.

San Diego's current market conditions actually favor sellers who act decisively. With 4,683 active listings countywide as of late December 2025 and median days on market around 43-49 days, the market remains balanced. Home prices are projected to appreciate 1% to 3% in 2026, suggesting stable conditions without the urgency of a rapidly falling market.

The real risk isn't market depreciation—it's political change. Once the transfer tax passes (if it does), there's no going back. Your only option will be to pay the tax or not sell.

Cash Buyer Advantage: 7-14 Day Closings vs. Traditional 45-60 Day Sales

If protecting your equity from the proposed transfer tax is a priority, your timeline for closing becomes critical. This is where the difference between traditional sales and cash buyer transactions becomes dramatic.

In San Diego's current market, homes are taking an average of 80 days to complete the sale process when working with traditional buyers who need financing. The median time on market is 41 days before going under contract, plus another 35-40 days for mortgage approval and closing.

Cash home buyers like San Diego Fast Cash Home Buyer can close in as little as 7 to 14 days because they eliminate the most time-consuming elements of traditional sales:

• No financing contingencies or mortgage approval delays
• No appraisal requirements that could derail the deal
• No buyer demands for repairs or credits
• No showing appointments or open houses
• No uncertainty about whether the deal will close

If political developments move quickly and the transfer tax measure gains momentum, that 60-day difference between a traditional sale and a cash sale could mean the difference between paying $800 and paying $46,000 in transfer taxes. Learn more about how long it takes to sell a house in San Diego.

While you'll typically receive 70% to 90% of market value (depending on property condition and market factors), the speed and certainty can outweigh the discount, particularly when facing time-sensitive circumstances. In the context of a potential $40,000 to $60,000 transfer tax, even a modest discount to secure a fast closing could result in significantly more net proceeds.

What Homeowners Should Do Now to Protect Their Equity

Given the uncertainty surrounding the proposed transfer tax, San Diego homeowners should take proactive steps to understand their options and protect their financial interests:

For homeowners in communities like Del Cerro, San Carlos, College Area, and throughout San Diego County's service areas, the key is having a plan before political events force your hand. The homeowners who will fare best are those who understand their options and can execute quickly if needed.

Frequently Asked Questions

Conclusion: Acting Before the Window Closes

San Diego's proposed 5,500% real estate transfer tax increase represents one of the most significant potential changes to homeownership economics in California history. For a homeowner with a $750,000 property, the difference between selling before and after this tax takes effect is $45,000—real money that could fund retirement, education, or a fresh start.

While the political process contains uncertainties and the measure may ultimately fail, the risk-reward calculation favors action for homeowners who were already considering selling. The Los Angeles experience with Measure ULA demonstrates that these "mansion taxes" can and do pass, often with unintended consequences that hurt middle-class homeowners.

The advantage of cash buyers in this environment is clear: speed and certainty. When facing a potential tax increase that could cost tens of thousands of dollars, the ability to close in 7-14 days rather than 45-80 days isn't just convenient—it's financially essential.

San Diego Fast Cash Home Buyer has helped hundreds of San Diego homeowners navigate time-sensitive situations, from probate sales to foreclosure avoidance to pre-divorce property division. We understand the urgency that San Diego homeowners face with this proposed transfer tax, and we're here to provide a fast, fair, and certain path to closing.

Don't wait until the ballot measure passes and the window closes. By then, it will be too late to protect your equity. Contact us today for a no-obligation cash offer and see exactly how much you could save by acting now rather than waiting to see what happens in Sacramento and at the ballot box.