San Jose’s Measure E Tax Is Changing—Here’s What Buyers and Sellers Should Know Before July 1, 2025
If you're thinking about buying or selling a home in San Jose, there's a local tax update around the corner that could seriously affect your bottom line. Starting July 1, 2025, the city is raising the threshold for its real estate transfer tax—known as Measure E—from $2 million to $2.3 million. And depending on your price point, that timing could either save you thousands or add unexpected costs at closing.
As a local realtor in Silicon Valley, I stay on top of changes like this because they directly impact my clients—especially in neighborhoods like Willow Glen, Sweetbriar, Cambrian, and Almaden Valley, where homes frequently fall into this tax range.
What Is Measure E?
Measure E is San Jose’s real property transfer tax, passed by voters in 2020. It’s charged when residential or commercial property is sold over a certain amount, and it’s collected on top of the standard county and state transfer taxes. The money goes toward building affordable housing and supporting services for unhoused residents—a good cause, but it’s also a big number to consider during a transaction.
Right now, the tax kicks in when a home sells for over $2 million. The rates are:
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$2 million to $5 million = 0.75%
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$5 million to $10 million = 1.0%
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Over $10 million = 1.5%
So, if you’re selling a home for $2.25 million today, you’re looking at a $16,875 tax bill, which usually comes out of both the seller’s proceeds and the buyers funds 50/50—unless negotiated otherwise.
What’s Changing on July 1, 2025?
Beginning July 1, the city will raise the tax threshold to $2.3 million. This means that homes sold at or under $2.3 million will no longer be subject to Measure E. It might seem like a small shift, but in markets like San Jose where many homes are listed in the $2M–$2.5M range, this change can mean thousands of dollars in savings—just based on the timing of your sale or purchase.
If you're close to that threshold, this is the moment to talk strategy. For buyers, waiting until after the change could mean you avoid the tax entirely. For sellers, closing before July might mean adjusting your list price or offer terms to account for the added cost.
Why This Matters in Neighborhoods Like Willow Glen and Sweetbriar
In areas like Willow Glen and Almaden, where charming updated homes often land right in the $2.5M–$4M range, this tax is more than just fine print. It’s something both buyers and sellers are now negotiating into their offers and closing timelines.
For example, 1714 Sweetbriar Drive, currently listed at $3.5 million, would trigger a Measure E tax of about $26,250. That’s a cost neither side wants to be surprised by. Knowing how this tax applies helps you price, negotiate, and plan better—especially in San Jose’s competitive real estate market.
What About the Rest of the Bay Area?
San Jose isn’t alone here. Cities like Los Angeles, San Francisco, Santa Monica, and Berkeley have passed similar real estate transfer taxes—often called “mansion taxes”—to fund local initiatives. These tax policies vary widely from city to city, and if you’re relocating or investing across markets, it’s important to understand how each one impacts your costs.
Being familiar with local transfer tax laws in San Jose gives you an advantage, whether you’re upsizing, downsizing, moving into a new school district, or listing an investment property.
How to Plan Ahead
If you’re thinking of selling your home in Willow Glen, Almaden, Rose Garden, or any part of San Jose—or buying in the $2M–$5M range—this tax should be on your radar. Closing just before or after July 1, 2025 could make a big difference in what you walk away with or pay at the table.
Smart timing matters, especially when you’re navigating one of the most competitive real estate markets in the country. Having an agent who knows how to leverage updates like Measure E can give you an edge.
If you want to run the numbers for your property or talk through how this change affects your timeline, I’d be happy to help. Real estate is local, but smart strategy is what makes the difference.
