Why tax Commercial Rents in SF

San Francisco is home to some of the most profitable companies and corporations in the world, yet state tax loopholes have allowed such companies to avoid paying the City millions.

How is this possible?

Current tax laws and regulations are being thwarted by real estate and investment corporations who are avoiding paying transfer taxes and property reassessment fees by buying and selling less than 50 percent of holdings in valuable San Francisco office buildings. This tactic of dividing the pie by precise fractions has cost the City millions in taxes while some of the wealthiest corporations continue to benefit from doing business in San Francisco.

How can SF commercial landlords pay their fair share?

San Francisco’s commercial tax rate is currently set incredibly low at .3 percent. Established almost a decade ago, the City’s commercial tax rate is significantly lower than other major urban areas. By increasing the commercial tax rate to 3.8 percent, still below that of New York City’s and the state of Florida, San Francisco can create an annual revenue stream of $130 million.

As American corporations are set to have record breaking years of profit, due to the recent historic Trump and Republican tax break, it is fair to require companies pay their fair share.

Read more about the millions in lost taxes in San Francisco 

By feasting on S.F. 'partial stakes,' big real estate investors are saving millions in taxes

San Francisco Business Times 

October 26, 2017

When landlord Shorenstein Properties looked for buyers for Twitter’s headquarters in 2015, the city of San Francisco was set to share in a big payday.

The value of the buildings at 1355 Market St. and 875 Stevenson St., 1 million square feet in all, had skyrocketed during Shorenstein’s ownership. The buildings were assessed at $237 million for property taxes, but investors paid more than $900 million to buy control of them.

How to sell a $1 billion S.F. office tower without paying transfer tax

San Francisco Business Times

October 27, 2017

One Market Plaza, San Francisco's third-most valuable building, has sweeping views of the Embarcadero and the Bay Bridge — and some of the highest rents in the city.

In 2014, the Blackstone Group (NYSE: BX) bought a 49 percent stake in the property, valuing it at over $1.2 billion, according to Real Capital Analytics. One Market's annual property tax didn't go up, and the city assesses its value at $811 million for the current fiscal year, about 50 percent lower than the deal price.

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