By Jon Coupal and Kammi Foote | Last week, the California Senate voted to pass Senate Bill 2 which would impose a new $75 tax on real estate documents filed with each county’s clerk recorder. If the bill becomes law, the projected revenue — over $250 million annually — would be dedicated to low income housing programs.
Like a recurring nightmare, this proposal to tax real estate transactions seems to come up every legislative session. Up to now, this regressive tax has failed to gain traction because of bipartisan opposition. Taxpayer and business interests hope that, once again, the bill fails to complete its journey through the legislative process.
Currently, certain real estate documents must be filed with the county in which the property is located.Recording fees are relatively modest, costing between $14 and $18 varying slightly among counties. The fees help defer the costs of administering the clerk/recorder’s office and, as long as the fees are low, they encourage people to record essential documents.
SB2 would increase that fee to anywhere between $89 and $93 per document; amounting to a tax increase of up to 1,250 percent. Anyone recording a property-related document would be required to pay the fee although sales transactions would be exempt. There is also cap of $225 on each transaction.
To read the entire column, please click here.