2008-07-15 5-C Submittals~ I
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2005 Board of Directors
President
Dianne Richmond
President-Effect
Eileen Walker
Treasurer
Eric Lim
Directors
Dania Alvarez-Morroni
Keikv McDonah
Rob Platt
Steve Sorensen
Troy Staten
Immediate Past President
Angela Mcintyre
Association Executive
Dee 4strafsky-Williams
Alameda Association of REALTORSO
2504 Santa Clara Avenue, Suite 1
Alameda, CA 94501
(510) 523-7229 ~ (510) 521-2134 Fax ~ www.AlamedaAOR.org
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2008 JUL I S P 4 42
July 15, 2008 ~ ~ r ~ ii € .r1i J._ ,`ii l ~ i_ ~~ f~~
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Honorable Mayor Johnson
Members of the City Council
Re: Alameda Association of Realtors Position on Transfer Tax Increase
A enda Item 5-C
Honorable Mayor Johnson and Members of the City Council:
REALTOf7'
I have been asked by our board of directors to present our association's position
on the proposed increase in real property transfer tax from $5.40 per $1,000 in
value to $14.50 per $1,000 in value.
First, however, I would like to extend our appreciation to the city manager,
Debra Kurita, for soliciting input from our association and taking the time to
discuss the current state of City of Alameda finances.
The board of directors has received input from its board members, association
members, and Alameda brokers. The response has been overwhelming in
opposition to an increase in the city transfer tax. While we understand the city is
currently facing a budget shortfall, our opposition to an increase in the transfer
tax is for the following reasons:
^ Dis ro ortionate Cost. Should the proposed measure pass in November,
many Alamedans will benefit while only a few will pay. It is typical that six
percent orfewer of a city's single family housing stock is transferred in
any one year and it is those people who will shoulder the burden of the
drastic increase in the transfer tax.
^ Excessive Burden on Homeowners. Imposition of an increase in transfer
tax adds one more cost to a growing list of expenses which must be
considered in the purchase andlor sale of a home. Alamedans currently
must comply with sewer lateral and gas shutoff point of sale ordinances
in addition to the existing transfer tax and other costs associated with a
real estate transaction. The parties in the sale of a $600,000 home
currently pay $3,240 in city transfer tax. An increase to the proposed rate
would result in a transfer tax of $S,?00, a 269°/o increase. If a homeowner
were to own his or her home for 10 years, the proposed increase
amortized over that period would cast an additionaR $546 in taxes every
year.
Re: Agenda Item #5-C
01-15-08
Honorable Mayor Johnson
Members of the City Council
July 15, 2008
Page Two
^ Taxation without Gain. Unlike capital gains tax, the transfer taxis levied
whether or not the seller makes a gain on the sale of his or her home. In
fact, many of today's sellers are losing money andlor selling their homes
without any equity. This results in the sellers having to pay money into
escrow to close their transaction. This increased tax will directly affect the
seller's ability to close the transaction and may even cause the transaction
to fail. Such failed transactions are likely to result in a foreclosure of the
property, further driving down prices in the immediate area.
^ Decreased Affordabili . An increase in transfer tax decreases the
affordability of housing.
^ Adverse Impact on Local Economy. Higher transfer taxes will result in
higher housing costs. Higher housing costs make it more difficult to attract
skilled workers from other areas and to keep existing workers.
^ Transfer Tax is Regressive in Nature. People spend a smaller share of
their income on housing as their income increases.
^ Volatili .Transfer taxes are an extremely volatile and unreliable source of
revenue given the fluctuations in the numbers of real estate transactions
from year to year.
fur 2l6 association members empathize with the budget concerns of the city. As
a group, we work and live predominantly in Alameda and are among Alameda's
most enthusiastic supporters. However, due to the nature and extent of the
proposed tax increase we oppose passage of the instant resolution and we will
vigorously oppose the increase in the transfer tax should it appear on the
November ballot.
Resp;~g'tffully,
Rob~`t'C. Platt
Chairman
Alameda Association of Realtors
Local Government Relations Committee
Who Pays What in Your County?
Alameda
Aiplne
Amador
Calaveras
Contra Carta
E!'Dorado
Fresno
Kern
Madera
Mann
Mendocino
Mewed
Mon#erey
W8p8
Nevada
Pincer
Sacramento
San Francisco
San Joaquin
S~rn.Mateo.
Santa Clara
Santa Crux
Shasta
Soiano
Sonoma
Stanisiaus
Tehama
Trinigr
ralo
Tuba/S~tter
Buyer pay :Buyer pay Selier pay $1.10 ~ Buyer-Seller 50/50
Except in the City of Alameda Alameda $5.4D
Buyer-Seller 50/50 ,Albany $11.50
Berkeley $15.00
Hayward $4.50
Oakland $15.00
Piedmont $13.00
San Leandro $6.00
Buyer-Seller 50/50 Buyer-Seller 50/50. ~ Seller pay $1,10 !None. ~ ~ ~ ~ -~~
Buyer-Seller 50/50 Buyer pay Buyer-Seller 50/50 $1.10 None
Buyer-Seller 5D/50 Buyer-Seller 50/50 Seller pay $1.10 None
Buyer pay ~ Buyer pay Selier pay $1.1D Buyer-Seller 50/50
Richmond $1.00
Buyer~eller 50/5D Buyer-Seller 50/50 Seller pay $1.10 None
Buyer-Seller 50/50 Seller pay Seller pay $1.14 'None
Buyer-Seller 50/50 Seller pay Seller pay $1.10 None
Buyer-Seller 5D/50 Seller pay in Valley Area; Buyer- Seller pay $1.10 None
Seller 50/50 in Mountain Area
Buyer pay Buyer pay Seller pay $1.10 Seller pay
Sari Rafae! ~ $3.1Q
Buyer pay Buyer pay Seller pay $1.10 ~ None
• ~ Buyer-Seller 50/50 Buyer-Seller 50/50 ~ Seller pay $1.10 None
Seller pay Seller pay Seller pay $1.10 None
Buyer pay Buyer pay ~ Seller pay $1.10 None.
Buyer-Seller 54/50 Buyer-Seller 50/50 Seller pay $1.10 ~~ None
Buyer-Seller 50/50 ~ Seiler pay - .. ~ . - Seller pay $1.10 : None;.-. ~. .. . -
Auburn/Tahoe City 50/50 ~ .
Seller pay Seiler pay Seiler pay $1.10 Buyer-Seller 50/50
Sacramento $2.75
Buyer pay Buyer pay .. Seller pay $1.10 Seller pay
$0$249,999. ~ $5.00
. ~ $250,000-$999,999 $6.80.
. $1;000,000 and up - $7.50
Buyer-Seller 50/50 Buyer-Seller 50/50 Seller pay $1.10 ,None
Buyer pay -Buyer pay - - - Seller pay $1.10 Buyer,~eller 50/50 ~ ~ -
San~Mateo ' $5.00
Seller pay Seller pay Seller pay $1.10 .Buyer-Seller 50/50
Pala Alto $3.30
Mountain View $3.30
San Jose $3.3Q
Buyer-Seller 50/50 Buyer-Seller 50/50 Seller pay $1.10 None
Buyer-Seller 54/50 Buyer-Seller 50/5D Seller pay $1.10 None
Buyer pay Buyer pay ~ Seller pay $1.1D Seder pay
' - Vallejo , $3.30
Buyer pay Buyer pay Seller pay $1.1D Seller pay
Cloverdale $1.10
Cotati $1.90
Petaluma $2.00
Rohnert Park $1.1D
Santa Rosa $2.00
Sebastopol $2.00
Buyer-Seller 50/50 Seller pay ~ Seller pay $1.14 None"
Buyer-Seller 50/50 Buyer-Seller 50/50 ~ Selier pay $1.10 None
Buyer-Seller 50/50 Buyer~eller 50/50 Seller pay $1.10 None ~ ~ .
Buyer-Seller 54/50 in Woodland Seller pay in Woodland Seller pay $1.10 Seller pay
Buyer pay in Davis Buyer pay in Davis Winters $4.55
Woodland $2.20
Seller pay Seller pay ~ Seller pay $1.10 None __ _ _---
Closing Costs are allocated between buyer and seller on the basis of tradi tion, but are subject to r
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Re: Agenda item 5•C