San Diego Vacant Homes Tax: Your Questions Answered About the June 2026 Ballot Measure
TL;DR
- Ballot Date: June 3, 2026 - San Diego voters decide on vacant homes tax
- Tax Amount: $8,000-$15,000 annually depending on ownership structure and year
- Target Properties: 5,140 second homes vacant more than 183 days/year, with 45% in coastal areas
- Implementation: Tax takes effect January 1, 2027; first bills mailed January 2028
- Decision Window: 22 months (March 2026 - January 2028) to sell, rent, or occupy before tax bills arrive
- Geographic Impact: La Jolla (751 homes), downtown (792 homes), Pacific Beach, Mission Beach, Ocean Beach, Point Loma most affected
On March 3, 2026, the San Diego City Council voted 8-1 to place a controversial "empty homes tax" on the June 2026 ballot, setting the stage for a decision that could significantly impact thousands of second home owners across the city. If approved by voters, this measure would impose an annual tax of $8,000 to $12,000 on vacant second homes beginning in 2027, with the first tax bills arriving in homeowners' mailboxes in January 2028.
The ballot measure targets approximately 5,140 second homes that sit vacant for more than half the year, with nearly half of these properties concentrated in coastal neighborhoods including La Jolla (751 homes), Pacific Beach, Mission Beach, Ocean Beach, Point Loma, and downtown San Diego (792 homes). According to the San Diego Union-Tribune, 45% of all affected properties are located in these desirable coastal areas and downtown.
For second home owners, the timeline is critical. With approximately 22 months between now and January 2028 when the tax would take effect, property owners have a limited window to evaluate their options: occupy the property for more than half the year, convert it to a long-term rental, or sell before the tax becomes a reality. This article answers the most pressing questions about this ballot measure and what it means for San Diego property owners.
What is the San Diego vacant homes tax ballot measure?
The San Diego vacant homes tax is a proposed ballot measure that would impose substantial annual taxes on second homes that remain unoccupied for more than 183 days per year. Authored by Councilmember Sean Elo-Rivera, the measure is designed to address San Diego's severe housing affordability crisis by incentivizing property owners to either occupy their homes, rent them to long-term tenants, or sell them to buyers who will use them as primary residences.
According to KPBS, the tax structure works as follows:
Tax Structure
Year 1 (2027):
- • Base tax: $8,000 per vacant second home
- • Corporate surcharge: Additional $4,000 for properties owned by LLCs, trusts, or corporations
- • Total potential tax: $12,000
Year 2+ (2028 and beyond):
- • Base tax: $10,000 per vacant second home
- • Corporate surcharge: Additional $5,000 for corporate-owned properties
- • Total potential tax: $15,000
- • Both amounts will be adjusted for inflation beginning in 2029
The City of San Diego's Independent Budget Analyst projects the measure could generate between $9.2 million and $21.4 million in the first year, depending on how many properties qualify for exemptions. According to iNewsSource, these funds would be directed to the city's general fund to support affordable housing, infrastructure, parks, libraries, and public safety initiatives.
Which properties would be subject to the San Diego vacant homes tax?
The tax applies specifically to second homes within San Diego city limits that are vacant for more than 183 days (approximately 6 months) during a calendar year. It's crucial to understand that this measure does not apply to:
Properties EXEMPT from the Tax:
- Primary residences - Your main home is completely exempt
- Short-term vacation rentals - Properties actively listed and rented on platforms like Airbnb or VRBO are exempt
- Long-term rental properties - Homes rented to tenants for 182+ days per year are exempt
- Properties outside San Diego city limits - The measure only affects properties within city boundaries
According to Times of San Diego, the measure includes several hardship exemptions:
Military service
Active duty service members on deployment
Long-term care
Owners residing in nursing homes or assisted living facilities
Death of owner
Estates in probate or being settled
Disaster damage
Homes uninhabitable due to fire, flood, or other disasters
Family member occupancy
When a family member resides in the property
Financial hardship
Legacy owners who can demonstrate financial inability to occupy or maintain
The geographic concentration is notable. The San Diego Union-Tribune reports that downtown San Diego has the single largest concentration with 792 vacant homes, followed closely by La Jolla with 751 vacant second homes. Other heavily affected areas include Pacific Beach, Mission Beach, Ocean Beach, and Point Loma - neighborhoods popular with vacation home buyers and real estate investors. Beyond the coastal concentration, the measure also impacts second homes in inland neighborhoods including North Park, Hillcrest, Mission Valley, University Heights, and Clairemont, where second home ownership, though less prevalent, still contributes to housing scarcity.
When would the vacant homes tax take effect if it passes?
Understanding the timeline is critical for second home owners considering their options:
Critical Timeline:
According to NBC 7 San Diego, this timeline gives second home owners approximately 22 months from March 2026 to January 2028 to make strategic decisions about their properties before the first bills arrive.
This implementation schedule is intentionally gradual to give property owners time to adjust. However, it also means that the clock is already ticking for those who want to sell before the measure potentially impacts property values or creates a surge of competing listings from other concerned second home owners.
How much would second home owners actually pay?
The financial impact varies significantly depending on how your property is owned:
| Ownership Type | 2027 | 2028 | 2029+ |
|---|---|---|---|
| Individual (personal name) | $8,000 | $10,000 | $10,000 + inflation |
| Corporate (LLC, trust, corporation) | $12,000 | $15,000 | $15,000 + inflation |
Long-Term Cost Example
A second home owner who keeps a La Jolla beach house vacant and holds it in an LLC would pay:
- • Over 5 years: Approximately $75,000-$80,000 (accounting for inflation)
- • Over 10 years: Approximately $160,000-$175,000
These costs represent a significant ongoing liability that effectively functions as a substantial increase in property ownership expenses. For a property with a typical San Diego coastal market value of $2-3 million, the annual tax represents approximately 0.4-0.6% of the property value each year - on top of existing property taxes.
According to Voice of San Diego, many vacation home owners in Pacific Beach, La Jolla, and Mission Beach hold their properties through LLCs for liability protection and estate planning purposes. These owners would face the higher corporate surcharge rate, making the financial impact even more substantial.
Why is San Diego considering this vacant homes tax?
San Diego is facing one of the most severe housing affordability crises in the United States, and city leaders view the vacant homes tax as one tool to address this emergency.
The housing shortage is staggering. According to iNewsSource, San Diego has failed to keep pace with housing demand year after year, permitting barely two-thirds of the homes needed. The region added 119,200 new households but built only 63,500 homes, creating a 55,700-unit shortage.
The Affordability Crisis in Numbers:
- Rental vacancy rates hover around 5%, keeping rents extremely high
- Nearly 59% of San Diego Community College students are housing insecure
- Over 12 million California households spend more than half their income on rent
- San Diego requires at least 12,000 new homes annually just to keep pace with population growth
Councilmember Elo-Rivera argues that 5,140 second homes sitting vacant for more than half the year represent a significant misallocation of scarce housing resources. According to CBS8, the measure aims to accomplish two goals:
Increase Housing Availability
By incentivizing owners to either occupy their homes, rent them to long-term tenants, or sell to buyers who will live in them
Generate Revenue
The projected $9-21 million annually would fund affordable housing programs, infrastructure improvements, and community services
Supporters point to Vancouver, Canada, where a similar empty homes tax reduced vacancy rates by 54% and brought over 15,000 properties back to market between 2017 and 2023, generating $142 million for affordable housing initiatives.
What are my options as a second home owner in San Diego?
If you own a second home in San Diego that could be subject to this tax, you have three primary options to consider:
Option 1: Occupy the Property 183+ Days Per Year
To avoid the tax, you must occupy your second home for at least 183 days (approximately 6 months) each calendar year. However, for most second home owners, this defeats the purpose of owning a vacation property. If you're spending half the year in San Diego, it essentially becomes your primary residence, and you may want to reconsider which home you claim as your main home.
Option 2: Convert to a Long-Term Rental
Renting your property to long-term tenants for 182+ days per year exempts it from the vacant homes tax. According to the KPBS report, you would need to provide documentation of a rental lease covering more than half the year.
However, this option comes with trade-offs:
- • You lose personal use of your vacation property
- • You must comply with California landlord-tenant laws
- • You may need to deal with tenant issues, maintenance requests, and turnover
- • Long-term rental income may be lower than short-term vacation rental potential (though short-term rentals are already exempt)
Option 3: Sell the Property
Many second home owners in Pacific Beach, La Jolla, Mission Beach, and Point Loma are considering selling before the tax takes effect. This strategy offers several advantages:
- • Avoid ongoing tax liability - Eliminate the $8,000-$15,000 annual expense
- • Sell before market saturation - If the measure passes, many other second home owners may simultaneously list their properties, potentially depressing prices
- • Preserve equity - Act before buyer perception changes regarding the cost of owning vacant second homes in San Diego
- • Tax certainty - Remove the uncertainty about whether the measure will pass
For properties held in LLCs or trusts facing the corporate surcharge, selling becomes even more financially compelling. A cash sale offers the fastest exit strategy, typically closing in 7-14 days with no repairs, inspections, or financing contingencies.
Should I sell my San Diego second home before the tax takes effect?
This decision depends on your individual circumstances, but several factors suggest that selling sooner rather than later may be advantageous:
Financial Analysis
If you're paying the full tax with corporate surcharge, you're facing $15,000 annually starting in 2028. Over a 10-year holding period, that's $150,000-$175,000 (with inflation adjustments) - money that could be invested elsewhere or used to purchase property in areas without vacant homes taxes.
For a La Jolla beach condo purchased as an investment or vacation property, the tax effectively reduces your net return on investment by 0.4-0.6% annually on top of existing property taxes and maintenance costs.
Market Timing Considerations
According to real estate experts, several market factors favor selling before January 2028:
Pre-emptive selling wave
If the measure passes in June 2026, expect many second home owners to list properties simultaneously between June 2026 and January 2028, creating inventory glut in coastal neighborhoods
Buyer perception
Once the tax is in place, future buyers of second homes will factor the ongoing $10,000-$15,000 annual cost into their purchase decision, likely reducing what they're willing to pay
Current market conditions
San Diego's housing market is currently showing signs of a "sweet spot" for sellers, with 26% of listings receiving price cuts, giving buyers more negotiation power
Who Should Strongly Consider Selling:
- Second home owners who use their property less than 30 days per year
- Properties held in LLCs or trusts (facing the corporate surcharge)
- Owners who purchased primarily as investments rather than for personal use
- Those who were already considering selling in the next 2-3 years
- Properties in La Jolla, Pacific Beach, Mission Beach, and Point Loma where second home concentration is highest
The 22-Month Window
The timeline from March 2026 to January 2028 represents a strategic planning window. Selling in 2026 or early 2027 allows you to:
- • Beat the rush of other second home owners listing properties post-June 2026 vote
- • Avoid any stigma or buyer hesitation associated with properties subject to the vacant homes tax
- • Receive a cash offer and close quickly without the delays and uncertainties of traditional listings
- • Preserve maximum equity before market dynamics shift
For second home owners in Pacific Beach, La Jolla, Mission Beach, Ocean Beach, Point Loma, and downtown San Diego, the question isn't just whether the tax will pass, but whether waiting to see the results is worth the risk of selling into a more saturated market later.
Conclusion
The San Diego vacant homes tax ballot measure represents a significant policy shift that will directly impact over 5,000 second home owners across the city, with the heaviest concentration in desirable coastal neighborhoods. Whether you view this as a necessary response to San Diego's housing crisis or an overreach of government authority, the financial reality is clear: if the measure passes, vacant second homes will face substantial ongoing tax liability beginning in 2027.
For second home owners weighing their options, the 22-month window between now and January 2028 offers a limited time to make strategic decisions. Converting to a long-term rental preserves the asset but sacrifices personal use. Occupying the property for 183+ days per year may be impractical for true vacation homes. And selling now, before the June 2026 vote and potential market saturation, offers certainty and the ability to redeploy capital without the burden of annual taxes.
If you own a second home in Pacific Beach, La Jolla, Mission Beach, Ocean Beach, Point Loma, or downtown San Diego and are considering your options, time is a critical factor. Whether the measure passes or fails, the months between now and implementation represent a unique decision window that won't be available after January 2028.