S.F. ‘BUILD Act’ is a big tax cut for the wealthy. Let’s just be honest about it.

May 25, 2026 - 13:32

Is the proposal to slash taxes on large real-estate transactions a bad idea? Not necessarily. Are its backers being honest about what it does? Not necessarily.

The so-called BUILD Act, which would dramatically cut the city's transfer tax on high-value property sales, is being sold as a tool to revive a struggling downtown. The logic goes like this: if you lower the cost of selling a commercial tower or a luxury condo building, investors will suddenly flood back into San Francisco, construction will boom, and the city will be saved.

That is a convenient story. But it leaves out the most obvious detail. The tax cut is enormous, and it overwhelmingly benefits the people who already own the most expensive real estate in the city. Under current law, a sale over $25 million triggers a 5.5 percent tax. The BUILD Act would drop that to roughly 2.3 percent. On a $100 million sale, that is a savings of over $3 million. That is not pocket change for a middle-class family. That is a massive windfall for developers and institutional investors.

The argument that this tax cut will pay for itself through increased economic activity is speculative at best. The city is already bleeding revenue. Cutting a tax that brings in hundreds of millions of dollars a year, with no guarantee of a return, is a gamble. And it is a gamble where the potential winnings go straight to the top.

If the city wants to incentivize development, there are smarter ways to do it. Target the tax break at projects that actually create affordable housing or bring in new businesses. Do not just hand a blank check to the wealthiest property owners under the guise of economic recovery. The honest conversation about the BUILD Act is not about whether it might help. It is about who it helps first and most.