5A Public Hearings 2019 0603 - Laserfiche WebLink

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MAJOR GENERAL FUND REVENUES REAL PROPERTY TRANSFER TAXES The Real Property Transfer Tax (Transfer Tax) rate set by the City is $6 per $1,000 of the value of consideration paid for the documented sale of real property or any transfer of interest in real property. The tax is due when the documents of transfer are recorded with the County. Title companies collect the tax as part of the sale closing process, and remit the funds to Alameda County when sales or transfers are finalized. Penalties are imposed on delinquent payments, and interest is charged from the date of delinquency until paid. Alameda County remits the amounts due monthly, and the amounts are credited to the General Fund. Analysis Because Real Property Transfer Tax is tied directly to all real property sales, it is a volatile revenue source, and difficult to predict more than one year at a time. Factors that affect the revenue generated by Transfer Taxes are the sale price of property and the frequency with which property is sold. These immediate factors are driven by the availability of mortgage loans, the level of long-term interest rates, the supply and demand for real estate in San Leandro, and general economic growth in the Bay Area. Forecast Although the City realized an increase in Real Property Transfer Tax of $5.5 million in 2016-17, in 2017-18 the City experienced a 5% decline, or $283,000 decrease in revenues. Consequently, the proposed revenues are expected to be flat for the new biennium. Staff is projecting a less than 1% average annual growth to be conservative, over subsequent years. Actual Projected 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 Collections $5.2 $5.0 $5.0 $5.0 $4.9 $5.1 $5.3 $5.4 $5.5 $5.5 $5.3 $5.2 $ Change (0.3) (0.2) - - (0.1) 0.2 0.2 0.1 0.1 - (0.2) (0.1) % Change -5.5% -3.8% 0.0% 0.0% -2.0% 4.1% 3.9% 1.9% 1.9% 0.0% -3.6% -1.9% Proposed Projected Revenue (Dollars in Millions)PROPERTY TRANSFER TAX 62 84