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While you promote your house in Emeryville, the town skims off 1.2% of the gross sales value. They name it a switch tax. So, for instance, the proprietor of a $500,000 property pays the town $6,000 proper off the highest from the proceeds.
It’s legalized fairness theft. It’s one factor for cities to levy annual taxes for companies they supply companies and residents. It’s fairly one other after they take a big chunk of property house owners’ fairness after they transfer, after they’re now not going to be utilizing the town companies that switch taxes fund.
Of 482 cities in California, solely 10 cost switch tax charges that match or exceed Emeryville’s. And now, with Measure O on the Nov. 8 poll, Emeryville officers need voter approval to take even an even bigger minimize of the property sale value.
For some gross sales, Emeryville’s switch tax can be the highest in California. Metropolis residents shouldn’t let that occur. They need to reject Measure O.
Below state regulation, property house owners in California cities pay a small county switch tax of 0.11% of the gross sales value. The counties often cut up the proceeds with the cities.
However cities that function beneath their very own charters, versus the final legal guidelines set by the state, can add their very own switch taxes with majority approval of voters. The 26 constitution cities which have finished so have a lot increased whole switch tax charges — as a lot as 15 occasions increased than the usual county price. Emeryville is already one of many worst.
The present 1.2% price in Emeryville applies to all properties, regardless of the gross sales value. Measure O would improve the tax to 1.5% for properties that promote for $1 million to $2 million, and to 2.5% for properties that promote for greater than $2 million.
In your entire state, based on March information from CaliforniaCityFinance.com, solely Albany, Berkeley and Oakland cost as a lot on a $1 million sale. And Emeryville’s proposed price for properties between $2 million and $3 million can be the best within the state. At $3 million, Culver Metropolis would have the highest price.
The taxes are usually cut up between property consumers and sellers. For consumers, which means more cash that they have to borrow to finance their properties. For sellers, the switch taxes are subtracted from the hard-earned fairness left after their mortgages are paid off. That’s much less cash for the down-payment on the subsequent residence or for retirement financial savings.
Metropolis Council members declare the file 2.5% price in Measure O for gross sales at greater than $2 million is aimed toward making bigger business properties pay a extra equitable share towards metropolis companies. That’s bogus. You don’t purchase giant business properties for as little as $2 million.
As a substitute, as property values improve over time, the upper switch tax charges will seize extra middle-class owners. That’s as a result of the $1 million and $2 million breakpoints within the tax charges should not listed to account for inflation.
Furthermore, the tax charges should not marginal. Which means, for instance, a house that sells at $999,999 might be taxed on the 1.2% price, or simply beneath $12,000. However a house that sells for $1 million might be taxed on the 1.5% price for your entire worth, not simply the quantity above $1 million. So, on this instance, that $1 improve within the gross sales value would improve the switch tax to $15,000.
Ostensibly, the aim of Measure O is to boost more cash for the town’s normal fund. There are fairer methods to perform that and nonetheless have a progressive tax construction. For instance, the town might search a parcel tax for present property house owners based mostly on sq. footage.
However charging property house owners as they’re leaving city is simply flawed. The present Emeryville switch tax is legalized fairness theft. Measure O would solely make it worse. Vote no.