CAR Sacramento Update – Private Transfer Tax

Published: July 19, 2007

<strong>REALTORS® SCORE ONE-TWO PUNCH AGAINST PRIVATE TRANSFER TAXES</strong>In the ongoing battle against the the pernicious practice of private transfer taxes, C.A.R. made great strides last week on two separate legislative fronts.<br /><br />With the help of REALTORS® who contacted their senators to voice concerns about AB 1574 (Houston), the bill legitimizing private transfer taxes was withdrawn from the agenda for the Senate Transportation and Housing Committee, apparently lacking sufficient support among committee members. An interim hearing is expected to be held during the fall to investigate the imposition of private transfer taxes by developers. AB 1574 is the builder-sponsored response to C.A.R. sponsored SB 670. A loophole in California law lets developers and other non-government entities impose &quot;private&quot; transfer taxes (PTTs) on homes every time the property is sold – with no oversight, no accountability and no limit on the number of separate private transfer taxes that can be piled onto a home. As introduced, AB 1574 is designed to legitimize the practice of imposing these &quot;taxes&quot; by making permanent the loophole that allows them to be imposed. While AB 1574's supporters claimed that the bill addressed many problems with these taxes brought to light by C.A.R.'s bill, it really did nothing to fix them. C.A.R. continues to oppose AB 1574 because it legitimizes PTTs without adequate safeguards.<br /><br />In a separate but equally significant development last week at the capitol, AB 980 (Calderon) passed the Senate Judiciary Committee. C.A.R. is the sponsor of AB 980 (Calderon) Disclosure of Already Imposed Private Transfer Taxes, which passed the Senate Judiciary Committee on July 10. This bill will require recordation of a separate 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, the duration of the payment obligation, and the recipient of the PTT payment.

Last modified: July 19, 2007 at 8:39 am | Originally published: July 19, 2007 at 8:39 am
Printed: September 25, 2020