Richmond City Council on Tuesday unanimously approved placing two tax measures before voters on the November ballot: a proposal to increase the real estate transfer tax for city properties valued at over $1 million, as well as a proposal to place a tax on vacant or unused properties in the city.
Real Estate Transfer Tax Proposal
The measure to change the city’s real estate transfer tax, imposed during the sale of a property, would not apply to properties valued under $1 million. It would increase the tax rate for properties valued between $1 million to $3 million from .7-percent to 1.25-percent. The tax rate for properties valued between $3 million to $10 million would go up from .7-percent to 2.5-percent and the rate for properties over $10 million would rise from .7-percent to 3-percent.
Proposed by Vice Mayor Melvin Willis and Councilmember Jael Myrick, the real estate transfer tax change would raise an estimated $4 million — funds that would go toward paying for a voter-approved fund for youth programs and services. On June 5, voters approved Measures E and K — known as the Kids First Initiative — that will eventually require the city to set aside 3-percent of its general fund to support expanded services for youth.
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A requirement of the Kids First Initiative, however, is that the city must pass a tax measure to help fund it. At first, the architects of the Kids First Initiative aimed to pass a soda tax, but then in June the state banned soda taxes for 12 years.
Myrick said the real estate transfer fee is a good alternative solution for funding the Kids First Initiative.
“It’s not going to impact anybody not selling their property,” Myrick said. “It’s not going to impact anybody who is a tenant. And people who own their property and are planning to sell it, if it’s worth less than $1 million, which is the vast majority of properties in Richmond, it’s not going to impact you.”
Special Parcel Tax on Vacant Properties Proposal
The other November tax proposal approved by council Tuesday — a special parcel tax on vacant properties to fund services addressing homelessness and blight — was proposed by Mayor Tom Butt and fashioned after a measure passed by Oakland City Council last week.
The measure, which requires approval from two-thirds of voters, would impose a $3,000 annual tax on a vacant developed parcel and $6,000 annual tax on a vacant undeveloped parcel in the city, raising about $5.4 million annually for 20 years. The money raised would fund services for the homeless, including housing, and for code enforcement to address blight, dumping and other related problems.