Thursday, August 20, 2009

Alameda Tranfer Tax Revenue Update

I want to give an update to Alameda's Transfer Tax for 2009.

I wrote about the Transfer Tax back in March and in one of my first posts was about Measure P, so I just thought I should continue to update how much money the "Tax" is generating throughout the year. First the disclosure: all of the numbers reflect residential housing sales recorded on the MLS. Commercial building and private sales are not included so the numbers are higher than reported. The intent is to get a reflection of what is happening.

Link to Larger Graph

Given all the factors putting pressure on the housing market foreclosure, a soft job market, tight lending and scared buyers/sellers the impact is has been harsh in the number of sales and the revenue generated. In 2008, MLS sales accounted for $446 Million in sales with $167 Million coming in the first seven months of the year. Compare Alameda sales in 2009 and you see that the first seven months have generated $127 Million: a 24 percent decline in taxable sales. Under the old tax rate 2009 would have been over $215,000 decline.

From January 1 to July 30, 2009, there were 229 sales that represent over $127 million dollars in transactions. Under the newly enacted $12 per $1,000 the transfer tax generated $1,526,876 in revenue. If the Council had not made the change ($5.40 per $1,000) the revenue would have been $687,094; a difference of $839,781.

In the last blog post I said that In the short-term the tax may be one more factor for people not to buy, but given the stress on the City’s General Fund the tax may have been a necessary step.I think that this continues to be true.

I will continue to follow this topic at the end of each quarter to see how it is pacing.

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