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Any tax imposed pursuant to this Article shall not apply with respect to any deed, instrument, or writing in connection with the conversion to condominium units of the following kind of stock cooperative project: a stock cooperative project (a) which is entitled to an exemption from the annual limitation imposed on the number of conversions and the annual condominium conversion lottery pursuant to Section 1396 of the San Francisco Subdivision Code; and (b) wherein 80 percent or more of the condominium units serve as security for loans in favor of the City and County of San Francisco, pursuant to the Homeownership Assistance Loan Fund (under San Francisco Administrative Code Section 10.100 – 08) or its predecessor program, as identified by the Mayor's Office of Housing, prior to the conversion.
(Added by Ord. 473-96, App. 12/13/96; amended by Ord. 20-09, File No. 081450, App. 2/5/2009)
(a) The tax imposed under this Article shall not apply to transfers of real property between spouses or between domestic partners.
(b) Individuals of the same sex who obtain a certificate of marriage or other official government document of any state or political subdivision thereof acknowledging their union in marriage shall be deemed to be in a "domestic partnership" that qualifies for the exemption under subsection (a) in the event such individuals are denied the legal status of marriage or the legal rights, privileges and obligations of spouses, or the marriage certificate or other official government document acknowledging their marriage is invalidated or revoked in a final judgment or by operation of law, because such individuals are of the same sex.
(c) In order to qualify for the exemption provided in this Section, the deed, instrument or other writing effecting the transfer of real property shall include a written recital, signed by either spouse or domestic partnership, stating that the transfer is entitled to the exemption for spouses and domestic partners.
(Added by Ord. 108-04, File No. 040493, App. 6/21/2004)
“Low Income Threshold” means the greatest of the following:
(1) 80% of the MOHCD Area Median Income;
(2) 80% of the area median income for the County of San Francisco, adjusted for household size, as published by the California Tax Credit Allocation Committee or its successor entity;
(3) “Lower Income” for the County of San Francisco, adjusted for household size, as published by the California Department of Housing and Community Development, or its successor agency, under the California Code of Regulations and pursuant to California Health and Safety Code Section 50079.5, as amended from time to time;
(4) “Low Income” for the County of San Francisco within the “San Francisco, CA HUD Metro FMR Area,” adjusted for household size, as published by the United States Department of Housing and Urban Development, or its successor agency; or
(5) The maximum household income for a unit to receive the welfare exemption under California Revenue and Taxation Code Section 214(g), as amended from time to time.
“MOHCD” means the Mayor’s Office of Housing and Community Development, or its successor agency, department, or office.
“MOHCD Area Median Income” means the median income as published annually by MOHCD for the City and County of San Francisco, derived in part from the income limits and area median income determined by the United States Department of Housing and Urban Development, or its successor agency, for the San Francisco County metro fair market rent area, adjusted solely for household size, but not for high housing cost area.
“Recorded Restriction” means a document, agreement, or instrument, recorded with the County Recorder, that restricts the use of the property against which the document, agreement, or instrument is recorded.
“Rent-Restricted Affordable Housing” means a property described under either of the following subsections (1) or (2):
(2) A Residential Rental Property that satisfies both of the following subsections (2)(A) and (2)(B):
(A) Meets the requirements of one or more of the following subsections (2)(A)(i), (2)(A)(ii), or (2)(A)(iii):
(i) Prior to and up to the time of the transfer for which an exemption is claimed under this Section 1108.6, was granted a welfare exemption by the County Assessor under California Revenue and Taxation Code Section 214 for at least 90% of all residential units in the property;
(ii) Prior to and up to the time of the transfer for which an exemption is claimed under this Section 1108.6, was unoccupied, uninhabited, or unused for residential or commercial purposes and contained no structures for which such uses were legally permissible; or
(iii) Meets the requirements of the following subsection (2)(A)(iii)a. and is the subject of the certification in the following subsection 2(A)(iii)b.
a. Prior to and up to the time of the transfer for which an exemption is claimed under this Section 1108.6, was wholly-owned, directly or indirectly, by one or more organizations that are exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, which organization(s) transfer a portion of their ownership interest(s) solely to one or more persons or legal entities who intend to hold the ownership interests in compliance with the welfare exemption under California Revenue and Taxation Code Section 214(g) for at least 90% of all residential units in the property.
b. The transferor(s) of the ownership interest(s) must certify to MOHCD that an application for the welfare exemption under California Revenue and Taxation Code Section 214(g) for at least 90% of all residential units in the property will be submitted to the County Assessor within the time limits specified in California Revenue and Taxation Code Section 271(a), and that such application will be substantially complete and valid within nine months of the date of the transfer.
(B) At the time of the transfer for which an exemption is claimed under this Section 1108.6 is, or concurrently with such transfer becomes, subject to a Recorded Restriction with an original term of at least 55 years from the date the property becomes available for residential rental use under such Recorded Restriction, and a remaining term of at least 35 years from the date of the transfer, provided that such Recorded Restriction, at a minimum:
(i) limits the maximum household income for each residential rental unit at initial occupancy to no more than 120% of MOHCD Area Median Income; and
(ii) sets a maximum household income limit applicable at initial occupancy for each residential rental unit (“Unit Maximum Income”) such that the average of all Unit Maximum Incomes in the property does not exceed the Low Income Threshold; and
(iii) limits the maximum monthly rent for each residential rental unit to no more than either:
a. the tenant-paid portion of the contract rent as determined by the San Francisco Housing Authority for residential ten- ants holding Section 8 vouchers or certificates; or
b. one-twelfth of 30% of the Unit Maximum Income; or
c. if the household income of the residential tenants in a residential rental unit exceeds the Unit Maximum Income after initial occupancy, one-twelfth of 30% of the household income of the residential tenants; and
(iv) provides for the regulation, monitoring, and enforcement of the restrictions in this subsection (2)(B) by a governmental agency.
For purposes of this subsection (2)(B) only, a “residential rental unit” does not include a unit for an onsite property manager.
“Residential Rental Property” means a property that may only be used to rent to residential tenants, including an onsite property manager, and excluding travelers, vacationers, or other similarly transient individuals, except that it may include: (1) up to 30% of the square footage of all floors other than the ground floor for non-profit space serving residents and/or the community, such as childcare centers, health clinics, or job training centers; and (2) any amount of square footage of the ground floor for non-residential space.
(b) Exemption from Increased Tax Rate. As authorized by the last sentence of Section 1102 of this Article 12-C, the increased tax rates imposed by subsections (d), (e), and (f) of Section 1102 shall not apply with respect to any deed, instrument, or writing that effects a transfer of Rent-Restricted Affordable Housing. The lower tax rate imposed by subsection (c) of Section 1102 shall apply to the entire consideration or value of the interest or property conveyed by a deed, instrument, or writing that is subject to the exemption in this subsection (b).
(c) Requirements for Exemption.
(1) Except as provided in subsection (c)(2), every person claiming the exemption under subsection (b) must:
(A) Obtain from MOHCD a certificate confirming that the deed, instrument, or writing effects a transfer of Rent-Restricted Affordable Housing.
(2) Notwithstanding the requirements in subsection (c)(1), every person claiming the exemption under subsection (b) for a deed, instrument, or writing that effects a transfer of Rent-Restricted Affordable Housing, when that deed, instrument, or writing is delivered on or after January 1, 2017, but prior to July 1, 2024, may do the following in lieu of the procedures described in subsection (c)(1):
(A) Obtain from MOHCD a certificate confirming that the deed, instrument, or writing effected a transfer of Rent-Restricted Affordable Housing.
(B) By December 31, 2024, submit the certificate described in subsection (c)(2)(A) of this Section 1108.6 to the County Recorder, along with a request for a refund of the tax paid on, or the cancellation or reduction of any deficiency assessed with respect to, the transfer subject to the certificate that exceeds the rates described in Section 1102(c). The County Recorder may authorize the Controller to refund these amounts, without interest, without the need for a refund claim.
(3) Failure to timely satisfy the requirements in this subsection (c) renders the transfer ineligible for the exemption.
(d) Revocation of Exemption.
(1) If a transfer of Rent-Restricted Affordable Housing was granted an exemption under Section 1108.6(b) on the basis that the property satisfied subsection (iii) of the definition of Rent-Restricted Affordable Housing in Section 1108.6(a)(2)(A) and the property did not satisfy subsection (i) or (ii) of that definition, the person claiming such exemption must, within the later of 25 months of the transfer and the date such person submits any request for refund, cancellation, or reduction under Section 1108.6(c)(2)(B), submit proof to the County Recorder that the property was granted a welfare exemption by the County Assessor under California Revenue and Taxation Code Section 214(g) for at least 90% of all residential units in the property within two years from the date of the transfer. The County Recorder may grant a one-year extension to the 25-month and two-year periods in this subsection (d)(1) if the welfare exemption application submitted to the County Assessor was substantially complete within nine months of the date of the transfer and the person claiming the exemption was diligently pursuing the required welfare exemption but was unable to obtain such welfare exemption within the two-year period.
(2) If the County Recorder determines that a transfer of Rent-Restricted Affordable Housing was granted an exemption under Section 1108.6(b) on the basis that that property satisfied subsection (iii) of the definition of Rent-Restricted Affordable Housing in Section 1108.6(a)(2)(A) and the property did not satisfy subsection (i) or (ii) of that definition, and that the property was not granted a welfare exemption by the County Assessor under California Revenue and Taxation Code Section 214(g) for at least 90% of all residential units in the property within two years from the date of the transfer (or the extended date under Section 1108.6(d)(1)), the County Recorder may revoke the exemption and issue a deficiency determination for the amount of tax exempted upon the basis of any information within the County Recorder’s possession or that may come into the County Recorder’s possession. Such deficiency determination shall bear interest at the rate of 1% per month, or fraction thereof, on the amount of tax exempted, from the date the tax would have become delinquent had the exemption in Section 1108.6 not applied, and shall be subject to a penalty of 35% of the amount of tax exempted. Such deficiency determinations and the amounts paid pursuant to such deficiency determinations shall be subject to the procedures otherwise applicable in Article 12-C of the Business and Tax Regulations Code, except for the provisions in Section 1115.2, and except that, if the County Recorder grants the one-year extension under Section 1108.6(d)(1), the time period in Section 1115(b) of the Business and Tax Regulations Code for the County Recorder to serve notice of the deficiency determination under this Section 1108.6(d)(2) shall also be extended by one year.
(e) Operative Dates.
(1) This Section 1108.66 shall apply to all deeds, instruments, or writings that effect a transfer of Rent-Restricted Affordable Housing other than deeds, instruments, or writings that effect a transfer under Section 41B.6 of the Administrative Code, as that Section 41B.6 existed as of June 3, 2019, that are or have been delivered on or after January 1, 2017, but on or before the sunset date in subsection (f).
(2) This Section 1108.6 shall apply to all deeds, instruments, or writings that effect a transfer under Section 41B.6 of the Administrative Code, as that Section 41B.6 existed as of June 3, 2019, that are or have been delivered on or after June 3, 2019, but on or before the sunset date in subsection (f).
(f) Sunset Date. This Section 1108.6
shall expire by operation of law on December 31, 2030, and shall not apply to any deeds, instruments, or writings that are delivered on or after January 1, 2031.
(g) Penalty Waiver. The County Recorder shall waive all penalties and interest imposed on transfers qualifying for the exemption in Section 1108.6
(b) for deeds, instruments, or writings that effected a transfer of Rent-Restricted Affordable Housing under subsection (2) of the definition of Rent-Restricted Affordable Housing in Section 1108.6
(a), when the deed, instrument, or writing was delivered on or after January 1, 2017, but prior to the effective date of the ordinance, in Board File No. 231007, adding this subsection (g). The waiver in this subsection (g) shall include penalties and interest on the portion of the transfer tax not subject to the exemption in Section 1108.6
(b). The County Recorder may authorize the Controller to refund any penalties or interest qualifying for waiver under this subsection (g), without interest, to the person that paid such penalties or interest if such person files a request for refund with the County Recorder on or before December 31, 2024.
(h) Severability. If any section, subsection, sentence, clause, phrase, or word of this Section 1108.6
, or any application thereof to any person or circumstance, is held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions or applications of this Section 1108.6
. The Board of Supervisors hereby declares that it would have enacted this Section 1108.6
and each and every subsection, sentence, clause, phrase, and word not declared invalid or unconstitutional without regard to whether any other portion of this Section 1108.6
or application thereof would be subsequently declared invalid or unconstitutional.
(i) Undertaking for the General Welfare. In enacting and implementing this Section 1108.6
, the City is assuming an undertaking only to promote the general welfare. It is not assuming, nor is it imposing on its officers and employees, an obligation for breach of which it is liable in money damages to any person who claims that such breach proximately caused injury.
(a) Definitions. For purposes of this Section 1108.7, the following terms have the following meanings:
“Converted Residential Property” has the meaning set forth in subsection (b) of this Section 1108.7.
“Development Application” means any application for a building permit, site permit, conditional use authorization, variance, or for any other authorization of a conversion of a property or portion thereof from a Nonresidential Property to a Residential Property required to be approved by the Planning Department, Zoning Administrator, Planning Commission, or Historic Preservation Commission.
“Exemption Certificate” means a certificate issued by the Planning Department showing:
(1) the square feet of gross floor area being transferred that is a First Transfer of Converted Residential Property that falls within the 5,000,000 square foot limitation in subsection (c) of this Section 1108.7; and
(2) the total square feet of gross floor area being transferred.
“Final Approval” means:
(1) approval of a conversion’s first Development Application, unless such approval is appealed;
(2) if subsection (1) does not apply and a conversion only requires a site or building permit, issuance of the first site or building permit, unless such permit is appealed; or
(3) if the first Development Application or first site or building permit is appealed, then the final decision upholding the Development Application, or first site or building permit, on the appeal by the relevant City board or commission.
“First Certificate of Occupancy” means the earlier of a certificate of final completion and occupancy, or a temporary certificate of occupancy, as those terms are used in Section 109A of the Building Code, as may be amended from time to time.
“First Construction Document” means the first building permit, building permit addendum, or other document that authorizes construction of the conversion, not including permits or addenda for demolition, grading, shoring, pile driving, or site preparation work.
“First Transfer” means the first transfer of a Converted Residential Property following issuance of its First Certificate of Occupancy if such transfer would have been subject to the tax imposed under this Article 12-C absent the exemption in this Section 1108.7. For Converted Residential Properties transferred in part, the first taxable transfer of each portion of a Converted Residential Property following issuance of its First Certificate of Occupancy constitutes a “First Transfer,” but subsequent transfers of the same portion do not constitute “First Transfers.” Notwithstanding the prior sentence, a “First Transfer” does not include any transfer of all or a portion of a Converted Residential Property after a transfer subject to the exemption in this Section 1108.7 where the tax on such transfer would have been imposed on the fair market value of the entire Converted Residential Property absent the exemption in this Section 1108.7.
“Nonresidential Property” means any property or portion of a property, other than a Residential Property and other than a property that contains no buildings or other structures.
“Qualifying Certificate” means a certificate issued by the Planning Department showing the square feet of gross floor area that is proposed to qualify as Converted Residential Property within the 5,000,000 square foot limitation in subsection (c) of this Section 1108.7.
“Residential Property” means a property or portion of a property with a structure or structures or portion thereof that may only be used for housing individuals, excluding travelers, vacationers, or other similarly transient individuals, for greater than 30 consecutive days (including permitted incidental uses). It includes, but is not limited to, dwelling units, student housing, group housing, residential hotels, senior housing, nursing homes, homeless shelters, and residential care facilities, regardless of how such uses would be considered under the Planning Code. “Residential Property” includes 100% of the gross floor area of a live/work unit. In properties with mixed residential and non-residential uses, “Residential Property” includes mechanical space and common areas including but not limited to circulation, lobbies, storage rooms, balconies, roof terraces, laundry rooms, and other resident amenity spaces, and including parking spaces or garages, in the proportion that such areas serve the residential uses to the total square feet of gross floor area served by such areas.
(b) Converted Residential Property.
(1) For purposes of this Section 1108.7, “Converted Residential Property” means a property or portion thereof that has received a First Certificate of Occupancy following conversion from a Nonresidential Property to a Residential Property, including conversions involving the demolition of Nonresidential Property to construct new Residential Property, and that meets all of the following requirements for such conversion:
(A) received a Final Approval before January 1, 2030;
(B) a Qualifying Certificate was requested with respect to the property or portion thereof on or after the effective date of this Section 1108.7, but before January 1, 2030;
(C) within three years of the later of receiving Final Approval or the effective date of this Section 1108.7, but not before the effective date of this Section, received a First Construction Document; and
(D) at the time of the transfer for which the exemption in this Section 1108.7 is claimed, the square feet of gross floor area of the improvements on the property divided by the lot area of that property is at least one.
(2) New square feet of Residential Property gross floor area in excess of the square feet of gross floor area of the original Nonresidential Property shall constitute Converted Residential Property only up to the new square feet of gross floor area that equals 10% of the square feet of gross floor area that was converted from Nonresidential Property to Residential Property.
(3) For demolitions of Nonresidential Property to construct new Residential Property, “Converted Residential Property” includes only the square feet of gross floor area of Residential Property in the new building that exceeds the square feet of gross floor area of Residential Property in the demolished building, up to a maximum square feet of gross floor area of Converted Residential Property equal to the total gross floor area of Non-Residential Property in the demolished building plus 10%.
(c) Exemption from Tax. Any deed, instrument, or writing that effects a First Transfer of Converted Residential Property, up to the first 5,000,000 square feet of gross floor area of Converted Residential Property, shall be exempt from the tax imposed under this Article 12-C, except as otherwise provided in this Section 1108.7. For purposes of this subsection (c), the “first 5,000,000 square feet of gross floor area” shall be determined in the order that the Planning Department receives each request for a Qualifying Certificate and shall be aggregated across all Qualifying Certificates issued and outstanding. If a deed, instrument, or writing effects a transfer of property only a portion of which is a First Transfer of Converted Residential Property, or only a portion of which is within the 5,000,000 square foot limitation, the tax shall apply to the proportion of the consideration or value that the square feet of gross floor area transferred that is not a First Transfer of Converted Residential Property or that is not within the 5,000,000 square foot limitation bears to the total square feet of gross floor area transferred, with the rate in Section 1102 determined based solely on that proportional consideration or value. Land associated with gross floor area qualifying for the exemption in this subsection (c) shall also be exempt in the proportion that the square feet of gross floor area transferred that is exempt under this subsection (c) bears to the total square feet of gross floor area transferred.
(d) Requirements for Exemption. Every person claiming the exemption under this Section 1108.7 must do all of the following:
(1) Request, at any time after Final Approval and in the form and manner required by the Planning Department, a Qualifying Certificate from the Planning Department. At any time after receiving a Qualifying Certificate, a request to confirm or adjust the square feet of gross floor area that is proposed to qualify as Converted Residential Property may be submitted to the Planning Department in the form and manner required by the Planning Department. Any increase in the square feet of gross floor area requested under this subsection (d)(1) that exceeds the qualifying square feet of gross floor area stated on the Qualifying Certificate or any amendment thereto shall qualify for the exemption in this Section 1108.7 only to the extent that the 5,000,000 square foot limitation in subsection (c) has not been exceeded at the time the Planning Department approves the requested increase.
(2) After receiving the First Certificate of Occupancy and in the form and manner required by the Planning Department, request an Exemption Certificate from the Planning Department for each transfer for which the person intends to claim the exemption in this Section 1108.7. Any increase in the square feet of gross floor area requested under this subsection (d)(2) that exceeds the qualifying square feet of gross floor area stated on the Qualifying Certificate or any amendment thereto shall qualify for the exemption in this Section 1108.7 only to the extent that the 5,000,000 square foot limitation in subsection (c) has not been exceeded at the time the Planning Department issues the Exemption Certificate.
(4) Failure to timely satisfy the requirements of this subsection (d) renders the transfer ineligible for the exemption in this Section 1108.7.
(e) Effect of Exemption on Other Taxes. Any tax exempted under this Section 1108.7 shall be deemed to have been paid for purposes of Section 954(d) of Article 12-A-1 of the Business and Tax Regulations Code.
(f) Regulations. The Planning Department and the County Recorder may each issue rules, regulations, and interpretations of this Section 1108.7 consistent with the provisions of this Section and Article 12-C of the Business and Tax Regulations Code as may be necessary or appropriate to carry out and enforce the exemption in this Section.
(g) Sunset Date. This Section 1108.7 shall expire by operation of law at the end of the day on December 31, 2054, and shall not apply to any deeds, instruments, or writings delivered on or after January 1, 2055.
(Added by Proposition C, 3/5/2024, Eff. 4/12/2024)
“Certificate of Final Completion and Occupancy” means a certificate of final completion and occupancy or an amended certificate of final completion and occupancy as those terms are used in Section 109A of the Building Code, as may be amended from time to time.
“First Construction Document” means the first building permit, building permit addendum, or other document that authorizes construction of a Newly-Constructed Building, not including permits or addenda for demolition, grading, shoring, pile driving, or site preparation work.
“Labor Organization” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.
“MOHCD” means the Mayor’s Office of Housing and Community Development, or its successor agency, department, or office.
“MOHCD Area Median Income” means the median income as published annually by MOHCD for the City and County of San Francisco, derived in part from the income limits and area median income determined by the United States Department of Housing and Urban Development, or its successor agency, for the San Francisco County metro fair market rent area, adjusted solely for household size, but not for high housing cost area.
“Newly-Constructed Building” means a building that has never before been used or occupied for any purpose.
“OLSE” means the Office of Labor Standards Enforcement, or its successor agency, department, or office.
“Qualified Investment Manager” means any of the following that manages or invests assets on behalf of one or more Qualified Pension Plans, as defined in this Section 1108.8(a):
(1) An investment adviser registered under the U.S. Investment Advisers Act of 1940, as amended from time to time, or an investment adviser exempt from registration pursuant to Section 203(l) or Section 203(m) of the U.S. Investment Advisers Act of 1940, as amended from time to time;
(2) An investment company registered under the U.S. Investment Company Act of 1940, as amended from time to time; or
(3) An insurance company pooled separate account of a state or District of Columbia regulated life insurance company.
“Qualified Pension Plan” means either subpart (1) or (2), as stated below:
(1) A pension plan that has all of the following elements:
(A) Constitutes a qualified trust under Section 401(a) of the Internal Revenue Code of 1986, as amended from time to time;
(B) Is either:
(i) A multiemployer plan collectively bargained and maintained by more than one employer and a Labor Organization; or
(ii) A plan collectively bargained and maintained by a Labor Organization; and
(C) Its beneficiaries may not decide individually whether to participate or share in the profits and losses of such plan’s investments; or
(2) An annuity plan that meets the requirements for the deduction of the employer’s contribution under Section 402(a)(2) of the Internal Revenue Code of 1986, as amended from time to time, and that has beneficiaries who are represented by a Labor Organization and the assets of which are managed without the direct intervention or control of the plan’s beneficiaries.
“Qualified Residential Rental Property” means a Residential Rental Property, whether or not the property is subject to a condominium map recorded with the County Recorder, that meets all of the requirements in subparts (1) through (4), as stated below:
(1) At the time of the transfer for which an exemption is claimed under this Section 1108.8, no less than 12% of the residential units on the property, which percentage shall be calculated by excluding any density bonus units permitted through Planning Code Section 206.3, California Government Code Section 65915, or any other density bonus program, are, or concurrently with such transfer become, subject to a Recorded Restriction that:
(A) limits the maximum household income for each residential rental unit to no more than 110% of MOHCD Area Median Income; and
(B) limits the maximum monthly rent for each residential rental unit to no more than one-twelfth of 30% of 110% of the MOHCD Area Median Income; and
(C) provides for the regulation, monitoring, and enforcement of the restrictions in this subpart (1) by a governmental agency; and
(D) has a remaining term of no less than 55 years from the date of the transfer.
(2) On or after June 3, 2014, received a Certificate of Final Completion and Occupancy for a Newly-Constructed Building.
(3) All on-site construction of the Newly-Constructed Building, from the date of the First Construction Document through the date of the Certificate of Final Completion and Occupancy for the Newly-Constructed Building, was performed by workers represented by a Labor Organization and paid not less than the Prevailing Rate of Wages as defined in Section 6.1 of the San Francisco Administrative Code, as amended from time to time, for such on-site construction work.
(4) At least one year before and through the date of the transfer for which an exemption is claimed under this Section 1108.8, one or more Qualified Pension Plans, either directly or through a Qualified Investment Manager, collectively held a $25 million debt or equity investment, directly or indirectly, in the single property being transferred, and each such investor maintained and enforced a Responsible Contractor Policy with respect to that investor’s portion of the $25 million investment.
“Recorded Restriction” means a document, agreement, or instrument, recorded with the County Recorder, that restricts the use of the property against which the document, agreement, or instrument is recorded.
“Residential Rental Property” means a property that may only be used to rent to residential tenants, including an onsite property manager, and excluding travelers, vacationers, or other similarly transient individuals, except that it may include: (1) up to 30% of the square footage of all floors other than the ground floor for non-profit space serving residents and/or the community, such as childcare centers, health clinics, or job training centers; and (2) any amount of square footage of the ground floor for non-residential space.
“Responsible Contractor Policy” means a policy that requires all on-site construction work be performed by workers represented by a Labor Organization.
(b) Exemption from Increased Tax Rate. As authorized by Section 1119, the tax rates imposed by subsections (e) and (f) of Section 1102 shall be reduced with respect to any deed, instrument, or writing that effects a transfer of an entire building that constitutes a Qualified Residential Rental Property, or an undivided interest in such entire building that constitutes a Qualified Residential Rental Property. For such transfers, the tax rate shall be $15 for each $500 or fractional part thereof for the entire value or consideration, including but not limited to, any portion of such value or consideration that is less than $10,000,000. If the exemptions in both Sections 1108.6(b) and this Section 1108.8
(b) apply with respect to any deed, instrument, or writing, the lower of the two rates in those two sections shall apply.
(c) Requirements for Exemption. Every person claiming the exemption under subsection (b), above, must meet all of the following requirements:
(1) Maintain all records necessary to prove that they are entitled to the exemption in this Section 1108.8;
(2) Obtain from OLSE a certificate confirming that the deed, instrument, or writing effects a transfer of a Qualified Residential Rental Property; and
(3) Submit the certificate under subsection (c)(2), above, to the County Recorder at the time such person submits the affidavit described in subsection (c) or (d) of Section 1111.
Failure to timely satisfy the requirements in this subsection (c) renders the transfer ineligible for the exemption.
(d) Operative Date. The exemption in Section 1108.8(b) shall apply to all deeds, instruments, or writings that effect transfers of Qualified Residential Rental Properties that are or have been delivered on or after the effective date of the ordinance adding this Section 1108.8, but on or before the sunset date in subsection (e).
(e) Sunset Date.
(1) The exemption in Section 1108.8(b) shall expire by operation of law at the end of the day on December 31, 2033, and shall not apply to any deeds, instruments, or writings that are delivered on or after January 1, 2034.
(2) Notwithstanding subsection (e)(1), above, with respect to a transfer of property that received a Certificate of Final Completion and Occupancy before the effective date of the ordinance adding this Section 1108.8, the exemption in Section 1108.8(b) shall expire by operation of law at the end of the day on June 30, 2029, and shall not apply to any deeds, instruments, or writings that are delivered on or after July 1, 2029.
(f) Non-Severability. If any part or application of this Section 1108.8 is found in a final decision by a court of competent jurisdiction to be invalid or unconstitutional, this Section in its entirety shall have no force or effect.
(g) Undertaking for the General Welfare. In enacting and implementing this Section 1108.8, the City is assuming an undertaking only to promote the general welfare. It is not assuming, nor is it imposing on its officers and employees, an obligation for breach of which it is liable in money damages to any person who claims that such breach proximately caused injury.
(Added by Ord. 225-24, File No. 240728, App. 9/20/2024, Eff. 10/21/2024)
(a) Definitions.
“Eligible Tenant” means a tenant to which the Port Commission conveys a leasehold interest in real property under the Port Commission’s jurisdiction, where such tenant was the tenant under a Prior Port Lease with respect to the same real property immediately preceding the effective date of the new leasehold interest, and the direct and indirect ownership interests in the tenant were identical under the Prior Port Lease at the time of termination and under the lease for which an exemption under this Section 1108.10 is being sought upon its effective date.
“Exempt Port Lease” means any deed, instrument, or writing pursuant to which the Port Commission conveys to an Eligible Tenant a leasehold interest in real property under the Port Commission’s jurisdiction, where such leasehold interest has an effective date that immediately follows the termination of a Prior Port Lease with respect to the same real property. For purposes of this Section 1108.10, real property is the “same real property” under a Prior Port Lease if the real property was subject to the Prior Port Lease immediately preceding the effective date of the deed, instrument, or writing for which an exemption under this Section is being sought.
“Prior Port Lease” means any deed, instrument, or writing pursuant to which the Port Commission granted a leasehold interest in real property under its jurisdiction with an effective date on or before December 31, 1979, without regard to subsequent amendments.
(b) Exemption. Any Exempt Port Lease with an effective date on or after November 1, 2024 and on or before December 31, 2034, shall be exempt from the tax imposed under this Article 12-C if the requirements for exemption in subsection (c) are satisfied.
(c) Requirements for Exemption.
(1) Except as provided in subsection (c)(2), every person claiming the exemption under subsection (b) must:
(A) Obtain from the Port a certificate confirming that the deed, instrument, or writing for which the person is claiming the exemption is an Exempt Port Lease; and
(B) Submit the certificate described in subsection (c)(1)(A) to the County Recorder at the time such person submits the affidavit described in subsection (c) or (d) of Section 1111.
(2) Notwithstanding the requirements in subsection (c)(1), every person claiming the exemption under subsection (b) for an Exempt Port Lease with an effective date on or after November 1, 2024, but prior to July 1, 2025, may do the following in lieu of the procedures described in subsection (c)(1):
(A) Obtain from the Port a certificate confirming that the deed, instrument, or writing for which the person is claiming the exemption is an Exempt Port Lease.
(B) By December 31, 2025, submit the certificate described in subsection (c)(2)(A) to the County Recorder, along with a request for a refund of the tax paid on, or the cancellation or reduction of any deficiency assessed with respect to, the transfer subject to the certificate. The County Recorder may authorize the Controller to refund these amounts, without interest, without the need for a refund claim.
(3) Failure to timely satisfy the requirements in this subsection (c) will render the transfer ineligible for the exemption under subsection (b).
(Added by Ord. 299-24, File No. 241084, App. 12/19/2024, Eff. 1/19/2025)
The tax imposed under this Article shall not apply where the deed, instrument, or other writing transferring title to real property between an individual or individuals and a legal entity or between legal entities results solely in a change in the method of holding title and in which the proportional ownership interests in the real property, whether represented by stock, membership interest, partnership interest, cotenancy interest, or otherwise, directly or indirectly, remains exactly the same before and after the transfer.
(As Sec. 1108(d), established by Ord. 315-67, App. 12/12/67; amended by Ord. 377-84, App. 8/31/84; Ord. 28-95, App. 2/3/95; Ord. 20-09, File No. 081450, App. 2/5/2009; amended and redesignated as Sec. 1109 by Proposition W, 11/8/2016)
(Former Sec. 1109 set forth by Ord. 315-67, App. 12/12/67; amended by Ord. 377-84, App. 8/31/84; repealed by Ord. 20-09, File No. 081450, App. 2/5/2009)
The County Recorder shall administer this ordinance. On or before the fifteenth day of the month the Recorder shall report to the County Auditor the amounts of taxes collected during the preceding month pursuant to this ordinance.
(Ord. 315-67, App. 12/12/67; amended by Ord. 352-84, App. 8/8/84; Ord. 377-84, App. 8/31/84)
(a) The County Recorder shall collect the tax hereby imposed and deposit the same to the General Fund. The County Recorder shall not record any deed, instrument or writing subject to the tax imposed by this Article 12-C unless the tax is paid.
(b) A declaration of the amount of the tax due, signed by the party determining the tax or his or her agent, shall appear on the face of every document subject to tax hereunder which is submitted for recordation. The declaration shall include a statement that the consideration or value on which the tax due was computed was not exclusive of the value of liens or encumbrances remaining on the interest or property conveyed at the time of sale.
(c) With every document subject to tax hereunder which is submitted for recordation, there shall also be submitted a separate affidavit stating all relevant information that is necessary for the determination of the proper transfer tax. A form for such affidavit shall be prepared by the County Recorder. The affidavit form shall include the following notice: “NOTICE: Any material misrepresentation of fact in this affidavit is a misdemeanor under Section 1116 of the Real Property Transfer Tax Ordinance. Any person who makes such a misrepresentation is subject to prosecution for such offense.”
(d) If the deed, instrument or writing by which any lands, tenements, or other realty sold within the City and County of San Francisco is granted, assigned, transferred, or otherwise conveyed is not recorded with the County Recorder’s Office, the person who makes, signs, or issues such document or for whose benefit such document was made, signed, or issued, shall submit to the County Recorder an affidavit stating all relevant information that is necessary for the determination of the proper transfer tax, on the form described in Section 1111(c). Such affidavit must be filed within 30 days from the date the document effecting the transfer is delivered. Such affidavit must be filed regardless of whether any transfer tax is due or paid. Filing an affidavit that the County Recorder determines to be incomplete in any material aspect may be deemed to be a failure to file this affidavit for purposes of the statute of limitations in Section 1115.
(e) In accepting a document for recordation, the County Recorder may rely upon the declaration of the amount of tax due and upon the affidavit of relevant information accompanying the document if the County Recorder has no reason to believe that the full amount of the tax due has not been paid.
(f) Every document subject to tax hereunder which is submitted for recordation shall show on the face of the document, or in a separate document, the location of the lands, tenements, or other realty described in the document.
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