| Government Affairs |
San Francisco: Fix Up a House; Sell It at Profit; Pay a Major Tax?
In San Francisco, if you buy a distressed property, fix it up and sell it (not all that uncommon), you could get slapped with a tax for making a profit in a proposal that originated with former San Francisco Supervisor Harvey Milk. Four of San Francisco's current supervisors have proposed a "Stop the Flip" law that will appear on the November ballot.
It is widely known the proposal is an effort to punish real estate flipping, the practice of buying, renovating and then quickly selling property. Supervisors John Avalos, David Campos, Jane Kim and Eric Mar say if approved, the proposal would impose a steep transfer tax on people who buy and sell multi-unit buildings within a five-year period. The rate starts at 24 percent if the sale takes place in the first year and lowers to 14 percent after five years.
The idea of imposing an "anti-speculation tax" was first backed by former Supervisor Harvey Milk in the 1970s, according to the San Francisco Anti Displacement Coalition, a group of tenant organizations.The idea got new life recently amid their concerns over escalating home prices and renter evictions that sometimes precede home sales. The ballot measure includes exemptions for single-family homes, condos or owner-occupied tenants-in-common units.
