A New Tax on Homeownership? What San Diego’s Proposed Transfer Tax Hike Means for You

A storm is brewing in San Diego County, and it has the potential to dramatically impact every homeowner and aspiring buyer in the region. County leaders are considering a proposal to increase the Documentary Transfer Tax (DTT) by a staggering 5,000 percent on high-value homes [1]. This is not just a minor adjustment; it’s a fundamental shift in how real estate transactions are taxed, and it could add tens of thousands of dollars to the cost of selling a home.

Understanding the Proposed Tax Hike

Currently, the DTT in San Diego County is a modest $0.55 per $500 of property value. The new proposal would raise this cap to as much as $30.55 per $500 on certain properties. To put that in perspective, a $1 million home sale that currently incurs a $1,100 transfer tax could see that tax bill skyrocket to over $61,000. Another proposal aims to raise up to $1 billion annually through similar tax increases.

County officials argue that this tax hike is necessary to generate revenue for public services. However, as real estate professionals, we have grave concerns about the unintended consequences of such a drastic measure, especially in a market already grappling with an affordability crisis.

The Ripple Effect on the Housing Market

This proposed tax is not just a tax on sellers; it’s a tax on the entire housing market. Here’s how it could impact you:

•For Sellers: The most immediate impact will be on your bottom line. A massive tax bill at closing could significantly reduce your net proceeds, making it harder to move, downsize, or invest in your next home. This could discourage many homeowners from selling, leading to a decrease in housing inventory.

•For Buyers: While sellers are technically the ones who pay the transfer tax, this cost will inevitably be passed on to buyers in the form of higher home prices. In a market where affordability is already a major hurdle, this added expense could push the dream of homeownership out of reach for many.

•For the Market as a Whole: A significant decrease in real estate transactions would have a ripple effect on the entire economy. Fewer home sales mean less business for real estate agents, mortgage lenders, home inspectors, and a wide range of other professionals who rely on a healthy housing market.

What You Can Do

These proposals are not yet set in stone. They will require voter approval, and a high-profile public debate is expected to take place in the lead-up to the 2026 ballot. It is crucial that every homeowner and aspiring buyer in San Diego County understands the potential impact of these tax hikes and makes their voice heard.

We encourage you to stay informed, engage in the public discourse, and carefully consider the long-term consequences for our housing market. This is not just about a new tax; it’s about the future of homeownership in San Diego.

Have questions about how this proposed tax could impact your real estate plans? Contact our team today for a confidential consultation. We’re here to help you navigate this complex issue and make informed decisions.

Reference:

Based on “Proposed Property Transfer Tax Increases Spark Concern Across San Diego County Housing Market,” read the full article here: https://www.sdar.com/news/property-transfer-tax-concerns-san-diego.html

Sources:

[1]: # "San Diego Association of REALTORS®, “Proposed Property Transfer Tax Increases Spark Concern Across San Diego County Housing Market,” January 6, 2026."