California Transfer Tax Fight Shifts as Ballot Measure Pulled

Over the last several weeks, California has experienced a transfer tax whiplash that has shaken up budgets, home buying and development.

Last month, a citizen-led initiative which proposed capping local real estate transfer taxes at 0.11 percent qualified for the statewide November ballot. The proposal, led by the Howard Jarvis Taxpayers Association would have upended government budgets in some of California’s major cities where taxes property sales in the upper price echelons reach as high as 6 percent.

Then, on Monday, Assemblymember Buffy Wicks, rolled out legislation to combat the ballot measure. Her bill, AB 736, proposed capping real estate transfer taxes at 1.5 percent in most California jurisdictions, and at 3 percent in cities like San Francisco and Culver City, where existing transfer taxes already exceed that threshold. The bill would also upend Los Angeles’s controversial “mansion tax,” Measure ULA, which levies transfer taxes as high as 5.95 percent for property sales over $10.6 million.

Wicks, one of the California legislature’s most prominent housing advocates, sought not only to undercut the ballot measure but to appeal to housing developers who have complained that high transfer taxes make it difficult to buy and convert expensive commercial properties into housing.

Then, late on Thursday, the Howard Jarvis Taxpayers Association voluntarily pulled its measure from the ballot after striking a deal with state lawmakers. Voters will instead vote on a proposal to increase the voter threshold for passing new special taxes to two-thirds, up from a simple majority.

The deal thrusts the Wicks bill — decried by progressives and realtors alike — into uncertainty. Progressives opposed limiting a wealth tax that could be used to finance affordable housing. The California Association of Realtors sent members a “red alert” on Wednesday, arguing the bill could make homebuying and selling more expensive by raising the transfer tax cap for California’s 361 general-law cities from 1.1 to 1.5 percent. (The state’s 121 charter cities, such as Los Angeles and San Francisco, do not have caps).

Whether Wicks will still be motivated to pursue a divisive bill that’s no longer a counter-punch remains to be seen.

Homes for AI stock

The artificial intelligence industry boom has thrown the Bay Area’s housing market into a frenzy. The median home price is $2.2 million, median one-bedroom rents are $4,000, and home sellers are trying to ship their properties for pre-IPO artificial intelligence stock.

A mansion in Marin, a Wine Country estate, and an Edwardian home in San Francisco’s Duboce Triangle neighborhood all went up for sale over the last two months, each worth millions. But the buyers weren’t only looking for cash: they wanted to trade their homes for pre-IPO stock of AI titans Anthropic and OpenAI.

The two companies, each valued at about a trillion dollars, have made plans to go public in the coming months, teeing up wealth creation event rarely seen in a region known for its quick riches.

Rachel Swann, an agent with Compass who listed the Duboce Triangle home said these kinds of sales have happened before, though they are often shrouded in privacy and occur at the upper echelons of the housing market.

Although none of the three homes ended up trading for the stock, they reflect the scramble in theBay Area of people doing everything they can to claim a piece of the AI gold rush.

San Francisco’s wealthier enclaves have also benefitted from the new wealth created by AI. Last week, two homes in Presidio Heights each closed for nearly $10 million. One of the homes was sold to an OpenAI employee and his wife — both in their early 30s. The neighborhood has seen an influx of luxury sales this year. As of early June, five homes had already sold this year for more than $10 million. There were seven such sales in all of 2025, according to Zillow data.