Shades of Senate bills past; Assembly Speaker Toni Atkins (D-San Diego) unveiled a bill to increase funding for affordable housing by adding a statewide $75 real estate document recording fee. Still to be determined is if the proposal is a tax (which requires two-thirds legislative approval) or a fee (which requires a majority approval). The $75 fee would be paid to the county whenever a real estate document is recorded and includes such transactions as property refinance, notice of default and/or notice of a trustee sale. Home sales would be exempt.
In 2013 and 2014, Senate Bills 391 and 1220 also proposed a statewide document recording fee of $75. For all practical reasons, such a fee actually creates a MINIMUM $225 transfer tax as virtually all transactions have a minimum of 3 documents recorded: the grant deed, the release and reconveyance, and a trust deed. And this $225 could be higher depending on the number of documents recorded. (e.g., CC&Rs). PLUS that doesn’t count the number of municipalities and counties that already have local transfer taxes in place.
Atkins office noted the new fees would generate $300 to $720 million a year for the state depending on the number of document transactions. The money would be spent on housing needs or the homeless and for people who make just above an area’s median income. Specifics are still under discussion.
Her bill also proposes to increase the low-income housing tax credit. The state’s low-income housing tax credit would jump from $70 million to $370 million, with that money going to private investors who build affordable housing. The extra dollars for the tax break would reduce how much the state collects in its general fund, which pays for basic state services such as education, prisons and social service programs.