The Vacant Homes Tax

November 5, 2024

Update (November 5th, 2024):

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.