If you are selling a home in San Francisco, you’ll encounter 2 major closing costs: sales commission and transfer tax. Transfer tax is the tax a City and County charges for the sale or transfer of real estate. Although technically negotiable, most often, as the Seller, you’ll pay this closing cost through the close of escrow. (One exception is the first sales of new construction when the Buyer typically pays the transfer tax.)
The amount of transfer tax varies by City and County. For example, in San Francisco, the transfer tax is as follows:
- For homes priced $250,000 to $1,000,000, the tax is $6.80/$1000 (of sales price).
- For homes worth $1-5 million, the tax is $7.50/$1000 (of sales price).
- For homes worth $5 million or more, it is $15/$1000 (of sales price).
As you can see, this is a hefty hunk of change and a major source of revenue for the City of San Francisco. One would think that given the current financial crisis, the Board of Supervisors would do all they can to encourage real estate sales rather than their current agenda of the opposite! But that, my friends, is another story.
For more info, click here for a chart of how to calculate Real Estate Transfer Tax by California City and County.