Supervisor Bilal Mahmood and Mayor Daniel Lurie are pausing their plan to halve the city's transfer tax on sales of multimillion-dollar properties, Mission Local has learned.
Mahmood said he recognizes San Francisco is in a budget crisis, and he and the mayor are "shifting focus" to find new revenue streams for the city. "Until that is resolved, we are not proceeding," Mahmood said.
The idea behind the proposal was to stimulate housing development and provide jobs for union construction workers.
But the so-called BUILD Act raised concerns, because even sellers of properties of $10 million or more that provided no new housing or construction work would have received a hefty tax break.
A controller's office report from March estimates that the city's present tax rate would raise some $400 million for the general fund in the next few years, critical income for the city amid a massive budget deficit that has already resulted in widespread cuts to jobs and services.
The mayor and Mahmood were proposing to halve that tax.
The BUILD Act would have slashed the transfer tax rate put in place by Proposition I in 2020: Taxes would drop from 5.75 percent to 2.75 percent for properties worth more than $10 million, and from 6 percent to 3 percent for those over $25 million.
Prop. I, which increased those rates to where they are today, was a major achievement of Mahmood's predecessor, former District 5 Supervisor Dean Preston, and passed with 58 percent of the vote. Preston lost to Mahmood in the 2024 election.