C.A.R. Opposes Transfer Tax Legislation

Source: California Association of Realtors

C.A.R. is opposing SB 1220 (DeSaulnier), which imposes a transfer tax to generate funds for affordable housing. C.A.R. is opposing SB 1220 because it will add to the cost of buying a home at a time when the housing market is struggling to recover. C.A.R. is an aggressive advocate for affordable housing, but believes it is bad policy to fund affordable housing by making housing less affordable and to fund affordable housing at the expense of homebuyers.

Sen. DeSaulnier has introduced SB 1220 to permanently fund an affordable housing trust fund. Unfortunately, SB 1220 creates a real estate transfer tax of $75 per document to fund this program. In virtually all transactions, a minimum of three documents are recorded – the grant deed, the release and reconveyance, and a trust deed. SB 1220 will create a minimum $225 transfer tax, and the amount could be even higher, depending on the total number of documents recorded.



C.A.R. opposes SB 1220 because it targets one group (homebuyers) to pay for affordable housing, which is an issue of broad social concern. While there may be a need for affordable housing funds, it is unfair to require only those individuals recording real estate documents to be the sources of that funding. The lack of sufficient affordable housing is a statewide concern. As such, if it is deemed necessary to implement some type of funding mechanism to generate funds for affordable housing, that mechanism should be as broad based as possible.



C.A.R. is also troubled that SB 1220 increases the already-substantial cost of buying a home. Many cities already have local transfer taxes. SB 1220 creates an additional transfer tax of at least $225 on almost all real estate transactions, including refinances, adding to the costly existing fees and taxes already paid by homebuyers. Keep in mind that every $1,000-increase in the median price of a home disqualifies almost 20,000 California households from affording a home.


Certain nonprofit groups are attempting to mobilize our members to garner support for this bill, despite CAR’s opposition. Please be aware of these communications, and if you received any, please forward to DeAnn Kerr at deannk@car.org .

While C.A.R. adamantly supports the creation of homeownership opportunities, SB 1220 is clearly not the way to achieve this goal. SB 1220 is expected to have a hearing in the Senate in April.

URL to original article: http://www.car.org/governmentaffairs/getinvolved/sb1220opposetransfertax/

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