Proposed Bill Will Add Additional Tax to the Purchase of Real Estate
There is a fine and sometime conflicting line between making homes affordable and affordable housing. Nearly everyone agrees that improvement in the current housing market conditions will play an important role in our country’s overall economy. Yet sometimes the steps taken to achieve this goal can get a bit, shall we say, squiggly. At the moment, there is a bill being proposed by a Senator DeSaulnier, called SB1220 which imposes yet another transfer tax to the fees already involved in the sale or purchase of real estate. The purpose of this bill is to generate dollars which will permanently fund an affordable housing trust fund. This transfer tax will fun approximately $75 per document and in nearly every property transfer that takes place these days, there are a minimum of three such documents which include the grand deed, the release and reconveyance as well as a trust deed. In other words, a minimum of $225 (and in many cases much higher) will be added to the cost of purchasing or selling a property.
The California Association of REALTORS® is opposing this bill. While their stance is that they are “aggressive advocates” for affordable housing, it is “bad policy” to fund affordable housing by in turn adding to the cost of purchasing such a home, especially when the housing market continues to struggle. According to a recent memo sent out by C.A.R., “C.A.R. believes it is unfair and unwise to target one group (homebuyers) to pay for affordable housing, which is an issue of broad social concern. C.A.R. is also troubled that SB 1220 increases the already-substantial cost of buying a home. While C.A.R. adamantly supports the creation of homeownership opportunities, SB 1220 is clearly not the way to achieve this goal.”
This bill is expected to have a hearing in the Senate this coming April. We will keep you all posted with the outcome. If you have a strong feeling in regards to this bill, by all means pick up the phone and call your elected officials. Keep those voices heard – whatever stance you take.
In the meantime, there’s lots of new snow heading our way and the conditions look fabulous to get out there and enjoy Spring skiing.