Update (November 5th, 2024):

• Suspended: In November 2024, the San Francisco Superior Court issued an order prohibiting the City from enforcing or administering the tax, effective December 6, 2024.
• Legal Challenge: A coalition of property owners and real estate groups challenged the tax, and the court ruled that it violates the U.S. and State Constitutions and is preempted by California law.
• Appeal Pending: The City and County of San Francisco intends to appeal the decision. The outcome of the appeal will determine the future of the tax. 

On October 31, 2024 the San Francisco Superior Court issued a ruling against the City and County regarding the Empty Homes Tax (Case Number: CGC-23-604600). The SF Treasurer is currently evaluating the court's decision and how it impacts our upcoming collections for the tax and we expect to have more information in the coming weeks. The SF Treasurer will continue to update their website with new developments. 

The Empty Homes Tax was approved by San Francisco voters on November 8, 2022 and became effective on January 1, 2024. Generally, it imposes a tax on keeping certain residential units vacant for more than 182 days in a calendar year. Filing and payment will begin for most people in 2025.

Proposition M Explained. 

If you own a vacant residential unit in San Francisco you may be subject to a new tax initiative starting January 2024. The measure is an effort to put empty units back onto the market and provide more housing. Details are below.

Whether you are wondering if you should rent a unit, sell it, or you’re considering an investment property, we are here to help! Give us a call.

Who is affected?

Property owners of condos, lofts, TICs, or Co-Ops in a 3-unit building or larger. San Francisco’s Empty Homes tax will tax owners who leave their units vacant for 182 days (6 months) or longer, whether consecutive or non-consecutive.

Who is exempt?

Single-family homes and duplexes are exempt. Units “occupied or intended for occupancy primarily by travelers, vacationers, or other transient occupants” are not subject to the tax. This excludes hotel rooms from the tax. Nursing homes and residential care facilities are also exempt.

Are there any limits to the 182 day Empty Home Tax clause?

YES.

• Any period during which the owner uses the unit as a principal residence and has claimed the Homeowner’s Exemption for property tax.  
• Any period that the owner has leased the unit to unrelated, permanent tenants.  A one-year period following the completion of construction of the unit.  
• A period, up to one year, between an application for a building permit, and the issuance or denial of the application.  
• A one-year period after the issuance of a building permit.  
• A two-year period following any disaster which has made the unit uninhabitable.  
• Any period in which the owner(s) is in long-term care, or a period after the death of a previous owner who was the unit’s sole occupant.

How Prop M Works?

The vacancy tax is based on the square footage of a unit plus how many years it has been left vacant. It is designed to address the 75.9% of property vacancies.

Revenue from this tax will go towards subsidies for seniors and low-income households, and pay for more affordable housing.

LEARN MORE

ARTICLE 29A Empty Homes Tax (Feb 7. 2022)

Economic Impact Report - City & County of San Francisco

MORE REAL ESTATE READING

If you’re navigating San Francisco’s evolving housing landscape, it helps to stay informed about the policies and market trends shaping local ownership. To deepen your understanding of how legislation and market shifts impact property values and investment opportunities, explore these related insights and resources:

• Understanding San Francisco Real Estate Taxes

• Selling a Home in San Francisco: What to Know

• San Francisco Market Updates

• San Francisco Neighborhood Guides

• Work With Legacy SF Homes

Whether you’re a homeowner considering your next move or an investor exploring local opportunities, Legacy SF Homes offers the expertise to help you make confident decisions in San Francisco’s unique market.