A vacancy tax on empty San Francisco storefront properties could be delayed beyond 2021 as shutdowns from the COVID-19 virus continue.
Meanwhile, a proposed ballot measure could double the city’s transfer tax on commercial and residential property sales valued at more than $10 million.
San Francisco voters approved Proposition D in early March, just two weeks before shelter-in-place restrictions forced all retailers and nonessential businesses to close. Under Proposition D, owners in certain commercial districts who allow their street-level storefronts to be vacant for more than 182 days face a new tax.
The initial plan was for the tax to be enacted in January 2021. It charges $250 per foot of sidewalk frontage for the first year of remaining vacant; $500 in the second year; and $1000 every year after. The taxes are earmarked for the city’s new small-business fund.
Considering the current challenges for retail stores during the pandemic, the tax may be delayed by a year or more. It needs to go through the budget and finance committee before the delay can be approved by the entire board.
San Francisco Supervisor Dean Preston introduced a plan to raise money for COVID-19 efforts through an increased transfer tax on transactions valued at or above $10 million.
As proposed, the measure would increase the tax from 2.75% to 5.5% for buildings sold between $10 million and $25 million. For properties sold for $25 million or more, the tax would jump from 3% to 6%. Owners who sell their assets to the city or to an affordable housing developer would be exempt from higher transfer taxes.
The measure must get support from at least four of San Francisco’s 11 supervisors. It also would require more than 50% approval among voters to pass.