Real Property Transfer Tax revenues ebb and flow with the housing market. Throughout the East Bay, the tax has generated robust revenue streams in recent years. And with signs the housing market is beginning to hum and stagnant revenues in Hayward, the city moved Tuesday to place a ballot measure on the November ballot asking residents to increase what is currently the lowest transfer tax among Alameda County charter cities.
The transfer tax increase could generate more than $7 million annually in new revenues during a time when Hayward’s city finances continue to struggle.
The council, however, declined to ask voters to increase the Transient Occupancy Tax, also known as a hotel tax. The proposed tax was estimated to generate roughly $800,000 in new revenues.
A majority of the council believed another tax measure ran the risk of overburdening voters. The Hayward Unified School District is also planning to place a bond measure on the November ballot at their meeting on July 25.
Real transfer taxes are paid after the sale of residential and commercial properties. Hayward’s current rate is just $4.50 per $1,000 of property value. Voters will decide whether to increase the rate to $8.50.
Revenues would be allocated to the General Fund. Approval from a simple majority of Hayward voters is required for passage this fall.
The proposed rate would still rank near the bottom half of Alameda County charter cities that charge a Real Property Transfer Tax. Only charter cities can approve increases in the rate.
Oakland and Berkeley assess a $15 fee; Piedmont charges $13, while in Emeryville and Alameda it’s $12. San Leandro’s transfer tax, meanwhile, is $6.
Hayward Councilmember Mark Salinas registered the lone opposition to placing the transfer tax on the ballot, asserting it disproportionately hurt buyers and sellers, in particular, young families looking to buy their first home in Hayward.
For an $500,000 home, buyers would be assessed roughly $2,000 more in Real Property Transfer Taxes, if the ballot measure is approved, said the city.