More Taxes! Ballot Initiative Proposed to Tax Real Estate Sales Over $5 Million

Exorbitant tax proposal, if passed, would fund homeless housing

A coalition of housing advocates, labor unions and so-called progressive activist groups have made plans to file paperwork for a November 2022 ballot initiative that would increase documentary transfer taxes on real estate transactions in the City of Los Angeles to fund permanent homeless housing.  The proposal would levy a 4% tax on real estate sales in excess of $5 million and 5% on real estate sales in excess of $10 million costing sellers hundreds of thousands of dollars.  Organizers of the proposed ballot initiative must collect approximately 65,000 signatures to place the proposal on the ballot.

Proponents of the initiative have stated that “millionaires and billionaires” should pay their “fair share” and the ballot initiative would merely impact the “privileged.”  Proponents of the initiative estimate that approximately 3% of real estate sale transactions in the City of Los Angeles would be impacted and would generate roughly $800 million per year based upon sales transactions between March 2019 to March 2020.  The proposed ballot initiative is titled “United to House L.A. Citizens” and proponents have stated the proposal might benefit from a recent California Supreme Court ruling affirming that tax increases proposed by citizen initiatives need only a simple majority vote to pass, rather than two-thirds.

Current documentary transfer taxes on real estate transactions within the City of Los Angeles, and in cities such as Berkeley, Oakland and Culver City fund general services of those cities.

Los Angeles’ voters already approved Proposition HHH in 2016, which was a $1.2-billion bond measure to fund homeless housing. In 2017, Los Angeles County voters passed a 10-year, quarter-cent sales tax increase to fund homeless services.  Since then, voters have been frustrated by the slow pace of projects and government waste.