Last evening Pacific Union CEO Mark A. McLaughlin and esteemed economists John Burns and Dean Wehrli presented a Real Estate Economic Forecast for the San Francisco Bay Area during a live telecast at the SF Jazz Center.
This is the first in a series of live economic forecasts, providing proprietary research findings that will give investors, buyers, and sellers the knowledge for success in their Bay Area real estate investments.
You can view the video recording of last evening’s presentation by clicking on the video preview above or by clicking here: pacificunion.fora.tv
Your Neighborhood Realtor,
ADVISORY RE: POSSIBLE NEW TRANSFER TAX (“PROPOSITION G”/NOVEMBER 2014 BALLOT)
Local law presently imposes a transfer tax on real property sales based upon the value of the property transferred. Generally, the value is equal to the total purchase/sales price.
A proposition to impose an additional transfer tax which would be applicable to residential properties containing from 2 to 30 units, including single family homes with 1 or more “in-law” units and tenancy in common interests, is on the November 2014 San Francisco ballot, “Proposition G.” If passed, it would increase the total transfer tax for transfers occurring after December 31, 2014 (the specified “effective date” in the proposition is January 1, 2015) regardless of whether the underlying purchase and sale agreement was entered into by the parties beforehand. Its proposed added tax would be as follows:
* For a sale during the 1st year of ownership: 24% of total gross sales price;
* For a sale during the 2nd year of ownership: 22% of total gross sales price;
* For a sale during the 3rd year of ownership: 20% of total gross sales price;
* For a sale during the 4th year of ownership: 18% of total gross sales price; and,
* For a sale during the 5th year of ownership: 14% of total gross sales price.
Properties held for 5 years or more prior to resale would not be subject to this additional tax.
If enacted, there would be few exemptions from this additional transfer tax. These exceptions include: the sale of a property within 1 year of the death of an owner of a 20% interest; the sale of units which are “new construction,” as defined in the proposal; the sale by an owner of record of at least a 10% interest of a property who has occupied the property for at least 1 year prior to the sale as the owner’s principal place of residence, as defined in the proposal; or, the property is being sold at a loss under certain circumstances defined in the proposal.
Buyers and Sellers must be aware, and therefore must assume all risks, that should Proposition G pass, they will be subject to its additional tax provisions. It is therefore recommended that Buyers and Sellers review the text of Proposition G and consult with a qualified real estate attorney if they have any questions or need any advice. Buyers should, in particular, consider whether Proposition G might impact their later plans for the ownership, use and later sale of the property. Sellers who acquired a property after January 1, 2010 should consider the effect that Proposition G would have on their transfer tax liability for any transfer occurring on or after January 1, 2015. Click here for the full text of Proposition G.
Feel free to give me a call if you have additional questions.