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Gayle Petersen - transfer tx position.doc - f age 2 SUMMARY AND RECOMMENDATIONS The program that we have outlined below, mirrors the program that the staff presented to you on October 151 in most areas. The key difference is that we believe a transaction would qualify for the exemption if either the buyer or seller qualified under one of the following categories: • Transactions where the purchaser of a primary residence in San Leandro sold another primary residence in San Leandro during the preceding 12 months. Example: A couple sells their condo in San Leandro. Two months later they enter into a purchase agreement for a single family home in San Leandro. The transaction for the single family home would qualify for exemption. • Transactions where the buyer of single family residence seismically retrofits their home within one year of purchase. Example: Buyer's new home is a 50 year old bungalow. Within a year, the buyers have bolted the foundation and shear walled the basement. The cost of the work was $5,000. The buyers had paid $1,200 in transfer tax to the city of San Leandro. They would qualify for a rebate of the full amount that they had paid. If the work cost less than the transfer tax the buyer paid, the buyer would be rebated only the amount actually paid for the work. • Transactions where the purchasers are first time home buyers who purchase a primary residence. Example: A first time homebuyer is defined by the IRS, Fannie Mae, and all Lending institutions as a person who has not owned a home during the prior three years. To change this is another definition would create a nearly impossible burden of proof for those administrating the program and for the participants. • Transactions where the home buyers qualify for the existing low income home buyer program in San Leandro. Example: The transaction of a low income home buyer program purchaser would qualify for the exemption. This would have the added benefit of putting the low income buyer in a more favorable position with the seller. • Transactions that are donations of property to a charitable organization Example: A seller donates his home in San Leandro to a certified charitable organization in San Leandro. • Transactions involving inherited properties Example: A daughter inherits her home from her deceased parents. Provisions 1. The rebate program would only apply to primary residences (single family residences or condominiums) sold for a purchase price of 125% of the median sales price. The median sales price is determined by the Year To Date figure for December of the preceding year. Statistical data is provided to the city each month by the Bay East Association reflecting the 2. The rebate program would apply to all transaction where the seller or buyer meets one of the criteria categories. 3. Although we have reservations on establishing a sunset date, if there is to be one, we