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Leaders of three East Bay cities want to take even more equity from property owners when they sell their houses or commercial buildings.
The transfer taxes rates in Albany, Piedmont and San Leandro already are among the 11 highest in the state. That’s out of 482 California cities. Now those three governments want to skim even more of the sale proceeds.
Voters should reject Measure CC in Albany, Measure TT in Piedmont and Measure VV in San Leandro.
And they should be appalled by the ballot deceit of leaders in all three cities, especially in San Leandro. They try to peddle their taxes as routine increases, never mentioning that, in comparison to the rest of California, the current and proposed rates are exorbitant.
It’s one thing for cities to levy annual taxes for services they provide businesses and residents. It’s quite another when they take a large chunk of property owners’ equity when they move.
Under state law, property owners in almost all California cities pay a small county transfer tax of 0.11% of the sales price. The counties usually split the proceeds with the cities.
But cities that operate under their own charters, as opposed to the general laws set by the state, can increase their transfer taxes with majority approval of voters. And the 26 cities that have taken advantage of it have much higher total transfer tax rates — as much as 15 times higher. The 11 highest are San Francisco and 10 East Bay cities.
The taxes are typically split between buyers and sellers. In most cases, they cost homeowners thousands — often tens of thousands — of extra dollars. For property buyers, that means more money that they must borrow to finance their homes. For sellers, the transfer taxes are subtracted from the hard-earned equity left after their mortgages are paid off. That’s less money for the down-payment on the next home or for retirement savings.
It’s legal theft of your equity.
The city transfer taxes have nothing to do with covering the paperwork to transfer title. The proposed increases for Albany, Piedmont and San Leandro would all be permanent, and the money could be used for any legitimate government purpose.
Yes, many cities are financially struggling, especially during the current downturn. In many cases, it’s due to a failure to pay down debts and control spending when times were good. But, regardless, there’s no justification for taking people’s equity.
Taxing them annually for services they’re receiving makes sense; taxing them when they’re going out the door does not.
Albany Measure CC — No
The transfer tax rate for Albany, including the small portion that goes to the county, is currently 1.26% of the sales price — the eighth highest rate in California. Measure CC would increase that to 1.61%. On the current Albany median residential sale price of about $1 million, the city and county would take a $16,100 cut. Nowhere else in California is the tax currently higher for a home of that price.
Backers, including four council members who signed ballot arguments, claim that they need the money in part because of the financial impact of coronavirus. Actually, they were working on this tax measure before the pandemic shut down the economy.
Piedmont Measure TT — No
Property owners in this wealthy city surrounded by Oakland already pay the East Bay’s highest supplemental school taxes. On top of that, they currently pay a transfer tax of 1.41%, including the small county share.
Measure TT would increase that to 1.86%. On the current Piedmont median residential sale price of $2.3 million, that works out to $42,780, which would be the highest tax in California for a home of that value. (Four cities have sliding scales with higher rates for properties that are more expensive than Piedmont’s median.)
San Leandro Measure VV — No
The city deceit in this measure is despicable. For starters, the ballot wording only tells voters that they plan to increase the rate by “$5 per $1,000 in valuation,” or 0.50% of the sales price. It makes no mention of the current transfer tax rate, including the small county share, of 0.71%.
The new rate under Measure VV would be 1.21%, including the small county share. On the current San Leandro median residential sale price of $730,000, that works out to $8,833.
The city spent $129,000 of taxpayer money on a misleading promotional campaign — to avoid breaking the law, they claim it’s just “informational.” The campaign includes a mailer that states that the city’s rate “is currently the lowest rate among eligible cities in Alameda County.” It’s deceit by omission. Like the ballot material, the mailer doesn’t mention that only charter cities are “eligible,” nor that San Leandro already has the 11th highest rate in the state.
