PROHIBIT/DISCLOSURE OF PRIVATE TRANSFER TAX (PTT)

Published: February 8, 2007

<p><strong>PROHIBIT/DISCLOSURE OF PRIVATE TRANSFER TAX (PTT)</strong>Dear Legislative Liaisons, Local Association Executives and Government Affairs Directors, we need more voices to be heard! As you know, it doesn't take much time, but the benefits are lasting! The key to success for REALTORS® is being informed and active! Please forward this link <a title="blocked::http://www.car.org/index.php?id=MzI5MzI=" href="http://www.car.org/index.php?id=MzI5MzI=">http://www.car.org/index.php?id=MzI5MzI=</a> and encourage your fellow REALTORS® to <a title="blocked::http://www.car.org/index.php?id=MzI5MzI=" href="http://www.car.org/index.php?id=MzI5MzI=">sign up</a> and become a part of the Government Affairs Team! </p><p><strong>Prohibit/Disclosure of Private Transfer Tax (PTT)</strong>&quot;Private&quot; transfer &quot;taxes&quot; are increasingly being used to settle disputes between environmentalists and builders or, in the alternative, by builders to proactively avoid a lawsuit by environmentalists or to smooth development negotiations with the local government. Typically, in return for an agreement by the environmental group to not pursue a lawsuit based on one of the state's environmental protection acts, the builder agrees to the imposition of one or more PTTs through a covenant included in the covenants, conditions and restrictions (CC&amp;Rs). PTTs have been as high as 1.75 percent of the purchase price of a home (for the median priced home this translates to almost $10,000…¦a significant amount of money): every buyer of a home in the development for 20 to 25 years or, even, in perpetuity must pay these &quot;taxes.&quot; In October, 2006, the California Association of REALTORS® Board of Directors adopted the final report of the PTTs Task Force. In that report, it recommended the following:<br /><br /><strong>&quot;That C.A.R. sponsor legislation to prohibit the imposition of a PTT.&quot;</strong><br /><br />In January, 2007, the California Association of REALTORS® Board of Directors, in addressing <strong><u>existing</u></strong> PTTs, made the following motion:<br /><br /><strong>&quot;That C.A.R. sponsor legislation to require a separate seller disclosure to potential home buyers as to whether the home they are considering purchasing requires the payment of a Private Transfer Tax (PTT), the percentage of the home price constituting the PTT (possibly with dollar amount examples), and/or the duration of the PTT, and that it may potentially affect the future resale value of the property.&quot;</strong><br />Please stay tuned for more details about these two important C.A.R. Sponsored bills.</p>


Last modified: February 8, 2007 at 8:56 am | Originally published: February 8, 2007 at 8:56 am
Printed: September 28, 2020