The entire value of the following types of transfers and sales are taxed at the 0.45% rate, regardless of the value of consideration for:
- 100% deed-restricted affordable housing (see definition, below)
- First transfer of newly constructed multi-family housing (see definition, below)
A taxpayer who is entitled to this reduction must either:
- Receive verification of eligibility from the City before the tax is paid; or
- Claim a refund by providing documentation of eligibility after the tax is paid.
To receive verification of eligibility from the City before the tax is paid:
- Complete an Application for Report of Building Records, which is available as an online form on the Building Safety Division webpage. Note that this form is required to be completed at the time of sale of any property in the City, regardless of whether the real property transfer tax reduction is being applied for or not.
- On the Application for Report of Building Records form, if applicable, check "yes" next to one or more of the following questions: "Is this transfer of improved real property to a nonprofit corporation, or limited partnership or limited liability in which a nonprofit corporation is the managing general partner or managing member?'; "Is this a transfer or sale of 100% deed-restricted affordable housing?"; "Is this a transfer or sale of newly constructed multi-family housing?" Answer any follow-up question prompts.
- Sign and submit the form. Finance Department staff will review your response and contact you to request any further documentation, if necessary. Finance Department staff will provide you with verification of eligibility, if applicable, via email.
- To request the status of your verification of eligitility, email the Finance Department or call (310) 253-5865.
To claim a refund by providing documentation of eligibility after the tax is paid:
Fill out the Claim For Real Property Tax Refund form, located on the Real Property Transfer Tax webpage. Navigate to the "Request a Refund" section and follow the instructions listed.
Affordable Housing is defined as
“A transfer of improved real property to a nonprofit corporation, or a limited partnership or limited liability company in which a nonprofit corporation is the managing general partner or managing member, accompanied by a binding agreement or covenant recorded on the property and enforceable by the City to provide all residential units on the property (other than units reserved for on-site property managers) at an affordable rent or affordable housing cost to lower income households as defined in California Health and Safety Code Section 50079.5.”
First transfer of newly constructed multi-family housing is defined as
“A transfer of real property that contains four or more dwelling units designed for permanent residential occupancy, including accessory dwelling units, and meets all of the following conditions:
- At least one or more of the dwelling units was newly constructed within the last five years prior to the transfer of the real property, based on the date of the issuance of the certificate of occupancy for such newly constructed dwelling units (“newly constructed” shall not include the remodel or renovation of an existing unit);
- The newly constructed dwelling units must have resulted in a net increase in the total number of dwelling units on the real property; and
- The transfer of real property is the first transfer following the issuance of the certificate of occupancy for such newly constructed dwelling units.”