We and the California Association of Realtors and Orange County Association of Realtors oppose the use of private transfer taxes without real safeguards needs to protect home buyers.
Assembly Bill 1574 was passed by the CA Senate Transportation Committee and will be considered for a vote in the Senate Judiciary committee (on July 11, 2007).
We oppose this bill. Why? These private taxes add to the cost of owning a home and will encourage developers, private entities and others hoping to profit from increased sales prices that do not add value to the property.
There is a loophole in California law that allows developers and other non-government entities impose private transfer taxes 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.
Some developers are now imposing these private TAXES on their developments in order to avoid potential lawsuits by environmental organizations or to avoid local government objections to the project.
There is nothing in current California law that prevents the imposition of these PRIVATE TAXES for underserved private gain.
We support legislation, Senate Bill 670 to prohibit these PRIVATE TRANSFER TAXES.
Why do we oppose AB 1574?
1. This is real money. If you impose a 1.75% PRIVATE TRANSFER TAX (highest rate that has come to light so far) on the state's median priced home of $567,000, that is a tax of almost $10,000, due and payable every time the property is sold. AB 1574 does not place a cap on the amount of the fee.
2. The PRIVATE TRANSFER TAXES are imposed on buyers each time the property sells.
3. There aqre few controls over how the collected revenue is spent.
4. PRIVATE TRANSFER TAXES increase the already substantial cost of buying a home.
5. Despite what some developers claim, these are TAXES and not mitigation fees.
6. These PRIVATE TRANSFER TAXES will hurt the housing market.
7. Even the disclosure provided by AB 1574 is inadequate.
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Harrison & Christi Long
Realtors & Advisors
Explore Group, Coldwell Banker Previews
949-854-7747
© Copyright 2007 – Rights reserved to Harrison & Christi Long
