San Diego County Abandons 55x Transfer Tax Hike: $60K Saved

What Was the Proposed Transfer Tax Increase?

San Diego County's Board of Supervisors sought to hire a six-figure political consultant to lobby the California Legislature for expanded local tax authority. According to the draft contract posted December 18, 2025, supervisors wanted state lawmakers to allow counties to raise real estate transfer taxes from the current 55 cents per $500 in value to $30.55 per $500—a 55-fold increase.

The Numbers That Shocked San Diego Homeowners

Here's how the proposed tax would have impacted typical San Diego County home sales:

The proposal emerged from a Democratic-led subcommittee focused on "sustainable fiscal planning" and potential revenue-generating ballot measures. According to the San Diego Union-Tribune, the county posted the request for quotes on December 18, closed submissions December 22, and canceled the entire effort on January 8, 2026.

Why Counties Need State Permission

California's Constitution restricts local governments' taxation authority. Cities and counties cannot unilaterally raise transfer taxes beyond rates established in state law without legislative approval. The current baseline county transfer tax of $1.10 per $1,000 (equivalent to 55 cents per $500) has been standard across all 58 California counties since these rates were codified.

Cities have more flexibility. San Francisco voters approved Proposition I in 2020, doubling transfer tax rates to 5.5% for properties over $10 million and 6% for properties over $25 million. Los Angeles implemented Measure ULA in April 2023, imposing a 4% tax on properties selling between $5.3 million and $10.6 million, and 5.5% on properties over $10.6 million.

San Diego County supervisors wanted similar authority—but applied to all home sales at all price points, not just luxury properties.

How Public Opposition Killed the Proposal

Republican Supervisor Jim Desmond led the public charge against the transfer tax lobbying effort, using social media and his official website to denounce what he called a "massive new transfer tax" pursued "quietly" during the holiday season.

Timeline of the Controversy

December 18, 2025: County posts request for quotes seeking political consultants to lobby Sacramento for expanded tax authority, including the 55x transfer tax increase.

December 22, 2025: Submission deadline for the consulting contract, with minimal public awareness.

Late December 2025: Supervisor Desmond discovers the proposal and begins public campaign, posting on social media: "While you were focused on the holidays, the County quietly moved to hire a six-figure political consultant—not to cut costs, but to seek changes in state law so County Supervisors can raise fees and impose new taxes."

January 7, 2026: Voice of San Diego reports that the county has halted the request for lobbyists to lay groundwork for tax hikes.

January 8, 2026: County officially cancels the request for quotes, posting notice on its contracting site.

Political Dynamics on the Board of Supervisors

The San Diego County Board of Supervisors currently has a 3-2 Democratic majority, with Chair Terra Lawson-Remer and fellow Democrats Monica Montgomery Steppe and Nora Vargas holding three seats. Republican Supervisors Jim Desmond and Joel Anderson hold the remaining two seats.

According to iNewsource reporting on 2026 political issues, the Board is considering "potentially two sales tax measures for city and county governments" in 2026, indicating that revenue generation remains a priority despite the transfer tax setback.

Supervisor Desmond framed his opposition as a transparency issue: "This is a win for transparency," he said in a statement after the cancellation. His campaign against the transfer tax emphasized the impact on middle-class homeowners, not just luxury property owners.

Why the Supervisors Backed Down

While county officials have not provided detailed explanations for canceling the lobbying effort, several factors likely contributed:

1. Public Backlash: Once the proposal became public knowledge, opposition mounted quickly from homeowners, real estate professionals, and taxpayer advocacy groups.
2. Political Timing: With 2026 being an election year and a competitive race brewing for the Board of Supervisors, vulnerable Democrats may have calculated that supporting a 55x tax increase was politically untenable.
3. Legislative Headwinds: Even with a Democratic supermajority in Sacramento, California voters defeated Proposition 5 in November 2024—a measure that would have lowered the voting threshold for local housing bonds from 66.67% to 55%. That defeat signaled voter resistance to expanded local taxation authority.
4. Alternative Revenue Options: The county continues to pursue polling and research on other potential tax measures, suggesting supervisors decided to focus on more politically viable revenue sources.

What This Means for Cash Buyers in San Diego County

The cancellation of the transfer tax increase provides immediate certainty for cash buyers operating in San Diego's competitive real estate market. Here's how this decision impacts transaction economics across Pacific Beach, La Jolla, Mission Beach, and all San Diego County service areas.

Transfer Tax Remains at Baseline Levels

San Diego County's transfer tax stays at the statewide standard of $1.10 per $1,000 of property value (equivalent to 55 cents per $500). According to California transfer tax guidelines, this baseline rate applies uniformly across the county, with no additional city-level transfer taxes in most San Diego municipalities.

For a typical cash purchase in 2026:

• $660,000 condo in Pacific Beach: Transfer tax of $726
• $917,000 single-family home in North Park: Transfer tax of $1,009
• $1,050,000 house in La Jolla: Transfer tax of $1,155
• $1,500,000 property in Point Loma: Transfer tax of $1,650

Cash Buyers' Closing Cost Advantages

Cash buyers in San Diego already enjoy significant closing cost advantages over financed buyers. According to closing cost analysis for cash buyers, cash purchases eliminate loan-related expenses including:

• Loan origination fees (typically 0.5% to 1% of loan amount)
• Lender's title insurance
• Appraisal fees ($500-$800)
• Credit report fees
• Lender-required inspections

San Diego closing cost data shows that buyers using financing typically pay 1% to 3% of the purchase price in closing costs, while cash buyers pay closer to 1% to 1.5%. On a $1 million purchase, that's a difference of $10,000 to $15,000 in savings.

Predictable Transaction Economics

The abandoned transfer tax increase means cash buyers can now rely on stable closing cost calculations for 2026. Typical cash buyer closing costs in San Diego County include:

With transfer taxes remaining at baseline levels, these costs are predictable and significantly lower than markets with mansion taxes like Los Angeles and San Francisco.

Competitive Advantage in Multiple Offer Situations

Cash buyers' ability to offer certainty on closing costs and timelines becomes even more valuable when sellers can rely on predictable transfer tax obligations. In San Diego's current market, where the median single-family home price reached $1,050,000 in early 2026, sellers choosing between cash and financed offers factor in:

1. Faster closing: Cash transactions close in 7-14 days versus 30-45 days for financed deals
2. No appraisal contingency: Cash buyers eliminate the risk of low appraisals killing deals
3. Lower closing costs: Predictable transfer taxes mean sellers face no surprise tax bills
4. No financing contingency: Zero risk of loan denial derailing the sale

The abandoned transfer tax increase preserves these competitive advantages for San Diego cash buyers.

Comparing San Diego to California's Mansion Tax Markets

San Diego County's decision to abandon the transfer tax increase sets it apart from California's two largest cities, which have implemented aggressive "mansion taxes" on high-value real estate. Understanding these differences is crucial for cash buyers operating across multiple California markets.

Los Angeles: Measure ULA's Impact

Los Angeles voters approved Measure ULA in November 2022, effective April 1, 2023. The measure imposes:

• 4% tax on properties selling between $5.3 million and $10.6 million
• 5.5% tax on properties over $10.6 million

These rates adjust annually for inflation. For transactions closing after June 30, 2025, the thresholds rose to $5,300,000 and $10,600,000 respectively.

Measure ULA generated $192 million in its first 10 months, making it the largest single source of revenue for Los Angeles's affordable housing and homelessness prevention programs. However, the tax also triggered market distortions:

• Rush of sales in March 2023 before the tax took effect
• Decline in luxury home transactions after implementation
• Sellers structuring deals at $4.99 million to avoid the threshold
• Legal challenges from property owners and real estate groups

San Francisco: Tiered Transfer Tax System

San Francisco implemented Proposition I in 2020, creating multiple tiers:

• 0.5% on properties under $100,000
• 0.68% on properties $100,000-$250,000
• 2.0% on properties $1 million-$5 million
• 2.75% on properties $5 million-$10 million
• 5.5% on properties $10 million-$25 million
• 6.0% on properties over $25 million

Unlike Los Angeles's two-tier structure, San Francisco's progressive system applies increased rates across a broader range of price points. A $2 million condo purchase in San Francisco incurs $40,000 in transfer taxes compared to $2,200 in San Diego County—18 times higher.

San Diego's Competitive Tax Position

With the transfer tax increase abandoned, San Diego County maintains one of the lowest transfer tax burdens among major California coastal markets:

This tax advantage positions San Diego County as increasingly attractive for high-net-worth buyers seeking coastal California properties without Los Angeles and San Francisco's luxury tax penalties.

What Other California Counties Are Watching

San Diego's abandoned lobbying effort signals to other California counties that statewide transfer tax increases face political headwinds. California Proposition 5's defeat in November 2024—which would have lowered voting thresholds for local bonds—demonstrated voter resistance to expanded local taxation.

However, individual cities within San Diego County could still pursue their own transfer taxes with voter approval, similar to San Francisco and Los Angeles. Cash buyers should monitor local ballot measures in their target neighborhoods.

What Regulatory Risks Remain for 2026 and Beyond

While San Diego County's transfer tax proposal is dead for now, several regulatory and tax policy risks remain on the horizon for cash buyers and sellers in 2026.

Other County Tax Proposals Still Active

According to Voice of San Diego's reporting, San Diego County continues to pursue "a separate contract for polling and research on potential tax measures." The county's 2026 fiscal priorities include:

1. Sales Tax Increases: iNewsource reports that supervisors are considering "potentially two sales tax measures for city and county governments" in 2026. While sales taxes don't directly impact closing costs, they affect overall cost of living and housing affordability.
2. Property Tax Overrides: The Board of Supervisors could pursue voter-approved property tax increases to fund specific programs, similar to school bond measures that add to property tax bills.
3. Development Impact Fees: Some jurisdictions are exploring increased fees on new construction, which indirectly affect resale home prices by reducing new housing supply.

City-Level Transfer Taxes Remain Possible

California cities have independent authority to pursue transfer taxes with voter approval. While San Diego County's attempt to lobby for countywide authority failed, individual cities like:

• City of San Diego
• Chula Vista
• Oceanside
• Carlsbad

Could place transfer tax measures on local ballots without state legislative approval. Cash buyers should monitor ballot measures in specific municipalities where they're purchasing properties.

State-Level Housing Policy Changes

California's Legislature continues to pursue housing policy reforms that could affect transaction costs:

1. FinCEN Cash Transaction Reporting: Effective March 1, 2026, cash purchases over $300,000 require additional reporting to the Financial Crimes Enforcement Network, adding compliance costs and paperwork.
2. Buyer Representation Agreements: New California regulations require written buyer representation agreements, affecting how buyers work with real estate agents.
3. Climate Disclosure Requirements: Proposed legislation would require sellers to disclose climate risks, potentially affecting property values in flood zones, wildfire areas, and coastal erosion zones.

Political Dynamics Through 2026

With a competitive race brewing for the Board of Supervisors in November 2026, tax policy will remain a contentious issue. The current 3-2 Democratic majority faces potential shifts if Republicans can flip one seat, which would create a 3-2 Republican majority.

Political analysts note that "big money and political clout are already pouring into a 2026 supervisor race" in North County, suggesting tax policy will be a central campaign issue.

How Cash Buyers Should Monitor Regulatory Changes

To stay ahead of potential tax policy changes, San Diego cash buyers should:

1. Track Board of Supervisors agendas: Review meeting agendas at sandiegocounty.gov/bos for tax policy discussions
2. Monitor local ballot measures: Check your municipality's election website 120 days before each election for proposed tax measures
3. Follow political campaigns: Supervisor candidates' positions on taxation provide advance warning of policy direction
4. Work with experienced cash buyers: Local cash home buying companies like San Diego Fast Cash Home Buyer stay current on regulatory changes affecting transaction costs
5. Lock in closing cost estimates: Get written estimates for all closing costs, including transfer taxes, before committing to purchases

How to Calculate Your Transfer Tax Savings

Understanding exactly how much the abandoned transfer tax increase saves you depends on your specific transaction. Here's how to calculate your savings and compare San Diego's tax environment to alternatives.

Current San Diego County Transfer Tax Formula

The calculation uses the following formula:

The sale price is rounded up to the nearest $500 before calculation. For example:

• Sale price: $987,500 → Transfer tax = (987.5 × $1.10) = $1,086.25
• Sale price: $1,050,300 → Rounded to $1,050,500 → Transfer tax = (1,050.5 × $1.10) = $1,155.55

What the Proposed Tax Would Have Cost

Under the abandoned proposal, the formula would have been:

Using the same examples:

• Sale price: $987,500 → Proposed tax = (1,975 × $30.55) = $60,336.25
• Sale price: $1,050,300 → Proposed tax = (2,101 × $30.55) = $64,185.55

Your Savings by Neighborhood

Here's what the cancellation saves cash buyers in San Diego's most active markets:

These savings apply to every transaction, whether you're a cash buyer purchasing investment properties or a seller accepting a cash offer.

Multi-Property Investors Saved the Most

For real estate investors acquiring multiple properties in 2026, the cumulative savings are substantial:

This represents a significant preservation of working capital for investors who rely on predictable acquisition costs.

Online Transfer Tax Calculators

Several online tools help estimate your exact transfer tax obligation:

• RK Mortgage Group's San Diego Closing Cost Calculator includes transfer taxes in total closing cost estimates
• Many Calcs California Closing Cost Calculator breaks down transfer taxes by county

These calculators now accurately reflect San Diego County's stable transfer tax rates for 2026.

Frequently Asked Questions

Conclusion: Protecting Your Transaction Economics in 2026

San Diego County's decision to abandon the 55-fold transfer tax increase on January 8, 2026, represents a significant victory for cash buyers, sellers, and homeowners across all 18 cities in the county. The cancellation preserves predictable closing costs and maintains San Diego's competitive advantage over high-tax markets like Los Angeles and San Francisco.

However, the episode reveals ongoing fiscal pressures facing county supervisors and the potential for future tax proposals—whether at the county or city level. Cash buyers and sellers should remain vigilant about:

• Board of Supervisors meeting agendas and fiscal planning discussions
• Local ballot measures in individual municipalities
• Political campaigns and candidate positions on taxation
• State-level housing policy changes affecting transaction costs

For now, San Diego County cash buyers enjoy stable, predictable transfer tax rates that make transactions economically efficient. On a $1 million purchase, you'll pay approximately $10,000-$15,000 in total closing costs—with transfer taxes representing just $1,100 of that amount. Compare that to the $60,200 you would have paid under the abandoned proposal, and the savings become clear.

Whether you're purchasing properties in Pacific Beach, La Jolla, Point Loma, or any other San Diego neighborhood, working with experienced local cash buyers who monitor regulatory changes can help protect your investment. At San Diego Fast Cash Home Buyer, we stay current on all tax policy developments affecting real estate transactions and provide transparent, predictable closing cost estimates.