The Perry House at 2606 Jackson Street has been sitting on the market at $22.5 million since late April. If it closes at that number this month, the seller's transfer tax bill runs somewhere around $618,750 less than an identical sale would have cost in May. Same house, same street, same buyer pool. The only thing that changed is the calendar.
That's not a rounding error. It's the direct result of a rate cut San Francisco enacted on large transactions, and it lands squarely on the price range where Pacific Heights does most of its business.
The Part of the Transfer Tax Nobody Explains Correctly
Most people assume a tax like this works the way income tax brackets work: you pay a low rate on the first slice, a higher rate on the next slice, and so on. San Francisco's transfer tax doesn't work that way.
The rate for your price tier applies to the entire sale price, not just the amount above the threshold. Sell for $4,999,999 and the whole amount is taxed at 0.75%, a bill of roughly $37,500. Sell for $5,000,000, one dollar more, and the whole amount jumps into the 2.25% tier, a bill of about $112,500. Same house, a dollar of difference in price, a $75,000 swing in what the seller owes at closing.
Sellers in the $5 million range have understood this cliff for years, which is why so many San Francisco luxury listings land at $4.95 million or $4,999,000 instead of a round $5 million. That pricing pattern hasn't gone anywhere. What's new is what just happened at the next two cliffs up, the ones that matter most for Pacific Heights.
What Changed on July 1
San Francisco's transfer tax has climbed as high as 6% since 2020, when voters approved Proposition I and roughly doubled rates on high-dollar sales. This year, Mayor Daniel Lurie and Supervisor Bilal Mahmood introduced a package called the BUILD Act aimed at rolling those top-tier rates back to where they stood before Prop I. It passed, and under the official ordinance, the new rates apply to any transfer occurring on or after July 1, 2026.
Here's the schedule as it stands right now, in early August:
| Sale Price | Rate through June 30, 2026 | Rate July 1, 2026 forward |
|---|---|---|
| Up to $250,000 | 0.5% | 0.5% |
| $250,000 to $999,999 | 0.68% | 0.68% |
| $1,000,000 to $4,999,999 | 0.75% | 0.75% |
| $5,000,000 to $9,999,999 | 2.25% | 2.25% |
| $10,000,000 to $24,999,999 | 5.5% | 2.75% |
| $25,000,000 and above | 6% | 3% |
Notice what didn't move. The $5 million to $10 million bracket is untouched, still taxed at 2.25%. The cut only applies to the two tiers above $10 million. That's a narrow change on paper. In Pacific Heights, where trophy sales routinely clear eight figures, it's the tier that decides the size of the check at closing.
Three Deals, Recalculated
The math gets more concrete when you run it against sales that actually happened this spring.
2830 Pacific Avenue, a Georgian Colonial on a street-to-street triple lot, sold at its full $27.5 million asking price in April after sitting on the market for a year. At the rate in effect that week, the transfer tax on that sale worked out to roughly $1.65 million. Under the rate that took effect in July, the same sale would have cost the seller about $825,000, a difference of roughly $825,000 for closing three months later.
2898 Vallejo Street, the Beaux-Arts mansion tied to the Alioto family, sold off-market for $56 million on April 7, the largest San Francisco residential sale since 2024. At the pre-July rate, that deal's transfer tax lands around $3.36 million. Post-July, the identical sale would owe about $1.68 million.
The Perry House at 2606 Jackson, listed for $22.5 million by Sotheby's agents Stacey Caen and Joseph Lucier, falls in the $10 million to $25 million bracket. If it closes at list price this month, the seller pays roughly $618,750 in transfer tax instead of the $1,237,500 an identical closing would have cost in May.
These are estimates based on the reported sale prices and the published rate schedule, not figures pulled from a closing statement. But the pattern holds across all three: for every deal in this price range, the difference between closing in the spring and closing now runs into six or seven figures.
For a seller with a home in the $10 million to $25 million range, the closing date isn't a scheduling detail anymore. It's a line item.
Why This Lands Hardest Here
Pacific Heights isn't the only San Francisco neighborhood with expensive homes, but it's one of the few where a meaningful share of listings clears eight figures on a normal week rather than as an outlier. Broadway and Vallejo carry some of the city's largest lots and its most consistent bay views, and local coverage of the Vallejo Street sale called Pacific Heights long shorthand for big-money real estate for a reason.
Demand at the top of the market has been strong enough this year that agents have started describing it as a supply problem rather than a demand problem. Sotheby's agent Annie Williams, quoted in the San Francisco Standard's coverage of the Vallejo Street sale, put it plainly: "there really is a housing crisis at the upper end, a mansion shortage." When inventory this scarce moves, the tax bracket attached to the sale price stops being a footnote and starts being a real number in the seller's net proceeds.
Below $10 million, none of this changes. The $5 million cliff is exactly as sharp as it was last year, and the pricing-just-under-the-line convention still makes financial sense at that level. It's only once a Pacific Heights listing crosses into eight figures that the calendar starts doing real work.
What This Means If You're Selling Above $10 Million
- Know which side of the line your price falls on. A list price of $9.9 million and one of $10.1 million sit in different worlds now that the upper brackets have been cut, and your agent should be running both numbers before you set an asking price.
- Model the closing date, not just the offer. A buyer's proposed timeline can change your net proceeds by six figures even if the offer price never moves.
- Loop in your escrow officer early. Transfer tax is calculated and collected at recordation, and your title company can confirm the exact bracket and rate before you're negotiating under pressure.
- Watch the November ballot. The rate cuts took effect by ordinance, but the city has a companion measure headed to voters this fall that would end the transfer tax exemption for certain foreclosure-related transfers. It doesn't touch arm's-length sales like the ones above, but it's part of the same larger rewrite of how the city taxes property transfers.
- Don't assume your comp's tax bill matches yours. The three deals above illustrate the mechanism, but every sale has its own structure, and entity transfers or trust sales can carry different tax treatment. A local escrow officer or real estate attorney should confirm the specifics for your transaction.
A Few Questions Worth Asking Directly
Does the buyer ever pay this tax instead of the seller? By custom, the seller pays San Francisco's transfer tax on residential sales, but it's a term of the purchase contract and can be negotiated. In a market this competitive at the top end, it's worth discussing with your agent before you're mid-negotiation.
Is this the same tax people call the "mansion tax"? It's related but not identical. Proposition I, passed by voters in 2020, is what raised rates on high-dollar sales in the first place. The BUILD Act doesn't undo what Prop I did at $5 million to $10 million. It only rolls the two tiers above $10 million back to where they stood before Prop I passed.
Does any of this affect Pacific Heights condos in older converted buildings? The tax applies to any deeded transfer of real property in the city regardless of building type. A condo sale above $10 million would be taxed under the same schedule as a single-family estate. The difference is simply how many Pacific Heights condo sales actually reach that price point, which is far fewer than the single-family side of the market.
If you're weighing a sale in this range, the timing and structure questions above are exactly the kind of thing worth working through before you set a list price, not after an offer arrives. Kate Stoll works Pacific Heights regularly and can walk through what your specific price point and timeline actually mean at closing. Schedule a consultation.
