Understanding Berkeley’s Empty Homes Tax: What Property Owners Need to Know

When Berkeley voters approved the Empty Homes Tax (Measure M) in 2022, many assumed it would only impact landlords keeping rental units off the market. But the ordinance, now codified in BMC Chapter 7.54, goes much further, taxing any residential unit left vacant for more than 182 days in a calendar year, regardless of whether it’s a rental.

Who Is Affected?

Any owner of a "Residential Unit" (defined broadly to include houses, apartments, ADUs, and more) is subject to the tax if the unit is vacant for more than half the year — even if it’s advertised for rent and even if the owner never intended to lease it. That includes:

• Second homes not in regular use

• Inherited properties left empty during probate

• ADUs or JADUs that sit unoccupied

• Single-family homes not used as a principal residence

The amount of the tax depends on the unit type:

• $3,000 for single-family homes, condos, duplexes, or townhouses under separate residential ownership (first year of vacancy)

• $6,000 for all other residential units (first year of vacancy) — meaning apartments and other multifamily units not held under separate ownership, such as units in a 10-plex or larger apartment building owned by a single person or entity

• In the second consecutive year of vacancy, these amounts double to $6,000 and $12,000, respectively

💡 Example: A 15-unit apartment building co-owned by four individuals is not exempt from the tax. If one unit remains vacant for over 182 days in 2024, even if it's been actively listed for rent, the City will impose a $6,000 tax on that unit, and all four owners are jointly and severally liable, meaning the City can collect from any or all of them, regardless of who was responsible for the vacancy.

🧠 Reminder: Even if the unit is listed for rent, the tax still applies if no tenant occupies the unit for more than 182 days in the calendar year.

⚠️ Important: The 182 days do not have to be consecutive. Any combination of vacant days throughout the calendar year counts toward the threshold.

Didn’t the Rent Board Create This?

Not exactly. The Berkeley Rent Board’s 2022 vacancy data was cited in the findings section of the ordinance to support the need for the tax. But the Rent Board is not responsible for administering the tax, and the tax itself is not limited to rent-controlled units. The City of Berkeley determines liability based on whether the unit was unoccupied and whether the owner submitted the required declaration.

🧠 Clarification: Just because the City referenced “Not Available for Rent” (NAR) units in Rent Board data doesn’t mean the Empty Homes Tax only applies to landlords. It applies to all owners, regardless of Rent Board status, unless a valid exemption or exclusion is claimed.

Who Is Exempt?

The ordinance provides for a few narrowly drawn exemptions. Most notable:

• Owner-occupant exemption: Available to natural persons or trusts that own only one property in Berkeley with four or fewer residential units (including ADUs and JADUs), provided that property is their principal residence. This exemption is not available to corporate owners, LLCs, or REITs.

• Nonprofit exemption: Organizations exempt from federal income tax under Section 501(c)(3).

• Government exemption: Federal, state, and local government entities, unless immunity is waived.

• Legal barrier exemption: Any person exempted by state or federal law.

Vacancy Exclusion Periods

Even if you're not exempt, you may qualify for an exclusion for any period the unit was legally vacant:

• Homeowners' Exemption Period (owner claimed the state property tax exemption)

• Lease Period (unit was leased under a bona fide rental agreement)

• Building Permit Application Period (while permit is pending, max 1 year)

• Rehabilitation Period (up to 2 years from permit issuance)

• Owner Death Period (up to 2 years or through probate)

• Owner In Care Period (owner was in long-term care or hospital)

• Disaster Period (fire, natural disaster, or similar — up to 2 years)

Penalties for Non-Compliance

If you don’t file the required occupancy declaration (even if you’re exempt), the City may presume your unit was vacant and impose the tax. Penalties and interest accrue quickly if not paid by the February 28 deadline.

🛑 Member Tip: When Silence Is Strategic

If you’re not renting your property and receive a letter from the Berkeley Rent Board, think twice before responding.

Replying can inadvertently land your property in the active rental registry—even if you're not currently leasing. Unless legally required (e.g., subpoena, violation notice), it may be best not to engage. Once you’re on the Rent Board’s radar, you may be expected to file annual rent registration or exemption forms, even if the unit remains owner-occupied or empty.

This approach isn’t a guarantee, but many long-term owners avoid unnecessary entanglements by limiting correspondence until they have a clear legal obligation to respond.

What Members Can Do Now

• Check whether your property is considered a Residential Unit under the ordinance

• Review your 2024 occupancy records now — did you cross the 182-day threshold?

• Remember: The tax went into effect on January 1, 2024, and is based on each calendar year. So if your unit was vacant for more than 182 days in 2024, you may owe the first-year tax. If it is again vacant for more than 182 days in 2025, it will trigger the higher, second-year tax. In other words, the vacancy clock resets each January 1, but consecutive years of vacancy increase the tax rate. 

• Prepare to file in early 2025 if you haven’t already

• Claim exclusions in advance, especially if you're navigating probate, permits, or long-term care

For questions about filing requirements or exemption categories, members can contact BPOA or visit the City of Berkeley’s Empty Homes Tax page. Remember, this tax is active through 2034 unless repealed or revised.

🧭 BPOA will continue tracking updates and providing timely guidance as more is learned about the City’s enforcement and appeal process. Check the Knowledge Hub for new articles and alerts.