How much does a $10 million overbid cost the seller who receives it? The question would have sounded silly a few years ago. On October 22, 20 Cherry St. closed for $28.5 million after listing at $18.5 million on October 2. The San Francisco Chronicle reported it as a city record for the largest dollar amount paid over asking.
Run San Francisco's transfer tax schedule on that sale. At the asking price, the city's tax would have been about $1,017,500. At the closing price it comes to about $1,710,000, roughly $692,500 more. Part of that jump has nothing to do with the extra $10 million being taxed at the old rate. The final price also crossed $25 million, and above that line the city charges a higher rate on every dollar of the sale. In the Presidio Heights market of 2026, the tax line on a seller's net sheet depends on the final bid, and the list price says very little about it.
A Rate That Applies to the Whole Price
San Francisco's real property transfer tax is set out in Section 1102 of the Business and Tax Regulations Code. The upper tiers are what matter on most Presidio Heights sales:
- $1 million to under $5 million: $3.75 per $500, or 0.75%
- $5 million to under $10 million: $11.25 per $500, or 2.25%
- $10 million to under $25 million: $27.50 per $500, or 5.5%
- $25 million and up: $30 per $500, or 6%
The Assessor-Recorder's transfer tax page lists the same schedule. The code also says how each rate is applied. Each higher rate covers "the entire value or consideration," including the part of the price below the threshold. Federal income tax brackets tax only the dollars above each line. San Francisco re-prices the whole sale once a line is crossed.
That creates a cliff at each threshold. A sale just under $5 million owes about $37,500, and a sale at exactly $5 million owes $112,500. Just under $10 million the tax is about $225,000, and at $10 million it is $550,000. At $25 million the bill goes from about $1,375,000 to $1,500,000.
What This Fall's Overbids Did to the Tax Line
Three Presidio Heights sales this fall show what happens when bidding runs well past the list price.
| Address | List price | Sale price | Tax at list price | Tax at sale price | Added tax |
|---|---|---|---|---|---|
| 3460 Clay St. | $11 million | $14.7 million | $605,000 | $808,500 | $203,500 |
| 120 Cherry St. | $14 million | $17.2 million | $770,000 | $946,000 | $176,000 |
| 20 Cherry St. | $18.5 million | $28.5 million | $1,017,500 | $1,710,000 | $692,500 |
The prices come from The Real Deal's coverage of 3460 Clay, which sold after 21 days on market in September, and of 120 Cherry, which sold for $3.2 million over its $14 million asking price in October. The tax figures are calculated from the city's rate schedule.
The Clay and 120 Cherry sales stayed in the 5.5% tier from list to close, so their added tax is simply the overbid taxed at 5.5%. 20 Cherry is different. If it had closed at $28.5 million under the 5.5% rate, the tax would have been about $1,567,500. Crossing $25 million added another $142,500 on top of the tax on the overbid itself.
Two June Sales, $800,000 Apart
The most useful comparison this year is two homes that sold on the same day in June. According to The Real Deal, 3875 Clay St., a five-bedroom home of 4,755 square feet, sold for $9.2 million. On the same day, 2881 Jackson St., a six-bedroom home of 5,000 square feet about ten blocks east, sold for exactly $10 million.
Here is what each seller kept after the city's transfer tax:
- 3875 Clay at $9.2 million. At 2.25%, the tax is about $207,000, which leaves roughly $8,993,000.
- 2881 Jackson at $10 million. At 5.5%, the tax is $550,000, which leaves $9,450,000.
- A hypothetical sale at $9,999,999. At 2.25%, the tax is about $225,000, which leaves roughly $9,775,000.
The Jackson Street sale brought in $800,000 more than Clay Street, but its seller kept only about $457,000 more. A price one dollar lower would have left that seller about $325,000 better off after the city's tax. These figures cover the city transfer tax only, not commissions or other closing costs.
The Bands Where a Higher Price Nets Less
Each cliff creates a band just above the threshold where the seller keeps less than at a price just under it. The band ends where the extra price finally covers the jump in tax. Solving the schedule for each threshold gives these figures:
- At $5 million: a sale has to reach about $5.08 million to net what a sale at $4,999,999 nets.
- At $10 million: the break-even is about $10.34 million.
- At $25 million: the break-even is about $25.13 million.
The $10 million band matters most here. According to The Real Deal's mid-June report, five Presidio Heights-area sales had already passed $10 million by mid-June 2026. The same outlet's June 25 article counted seven sales above that mark in all of 2025. Prices are being pushed up through the $10 million line more often than before, and some of the homes involved were listed well below it. 3460 Clay listed at $11 million, but a home asking $8 million or $9 million can now plausibly draw final bids that land between $10 million and $10.34 million.
Why a List Price Under the Line No Longer Holds the Line
Pricing a home below a threshold used to keep the expected sale on the lower-rate side. When bids regularly finish 20% to 50% over asking, the list price no longer predicts which tier the sale lands in. On 20 Cherry, the gap between asking and closing was about 54%, by the Chronicle's figure. The schedule doesn't care about the list price. It applies to whatever price is recorded.
Who pays is set by custom and the contract. Old Republic Title's Bay Area closing-cost guide labels San Francisco's transfer tax as seller-paid, notes that the county portion is included in the city tax, and says closing-cost allocations can be negotiated. The code makes the parties to the deed responsible for the tax. On a contested Presidio Heights listing, two offers can sit within $300,000 of each other on price while one of them leaves the seller with less after the transfer tax.
The November Ballot Left the Schedule in Place
Two efforts to change the top tiers came up in 2026, and neither has changed the rates a Presidio Heights seller pays.
The BUILD Act ordinance proposed halving the rates on transfers of $10 million and up, but it expressly excluded single-family homes. The Board of Supervisors filed it as inactive on October 8, 2026.
Proposition I on the November 3 ballot would have cut the city's 5.5% and 6% rates in half and replaced them with a "House SF" tax at the same levels, according to SPUR's voter guide. For a seller, the total would have stayed about the same. In the Department of Elections' preliminary results updated November 8, it was losing 52.06% to 47.94%. Results can still change until certification. Proposition J was leading with 80.9% in the same count. It removes a foreclosure-related exemption for certain commercial and large multifamily transfers and leaves the ordinary sale rates unchanged, as the San Francisco Public Press explained.
FAQ
Does the cliff matter for a condo or smaller home in the neighborhood? Yes, at $5 million, and every tier below that is calculated on the whole price too. The jump at $5 million is $75,000, and the break-even is about $5.08 million.
Is the 6% rate on 20 Cherry the highest San Francisco charges? Yes. At $30 per $500, the $25 million-and-up tier is the top of the schedule in Section 1102.
Do off-market sales follow the same schedule? Yes. The tax is calculated on the recorded price whether or not the home was listed publicly. That includes this summer's off-market sales at 3277 Pacific Ave. for $55.8 million and 3230 Jackson St. for $12 million, both reported by The Real Deal.
This post is general information about how San Francisco's transfer tax works, not legal, tax or financial advice. Please confirm the numbers for your own sale with your tax advisor, attorney and escrow officer.
If you're thinking about selling in Presidio Heights and want to see your likely net proceeds at several possible sale prices, including the ones near the $5 million and $10 million lines, the Govoni Real Estate Team will gladly sit down and run those figures with you before you list. Contact us and we'll build the net sheet together.
