The Inglewood City Council voted to place a property transfer tax measure on the General Municipal Election ballot, despite pleas from homeowners for increasing it incrementally and real estate professionals’ objections that it will stifle a slowly recovering residential market.
“The economy is just starting to recover. We can least afford to have this happen in Inglewood,” said real estate agent, Ted Brass during the Council meeting. According to the ballot initiative, “Inglewood residents would not be impacted by the increase, unless they purchased a new home in Inglewood.”
However, realtors said the sellers usually pay the property transfer tax.
“Either way this burden will affect the sale directly or indirectly,” said Brass in a later interview. “If the seller is paying for it, they may only be expecting to clear $4,000. Their homes may have lost value.
And it’s difficult to ask the buyer to pay for it, since jobs are cutting back and people are earning less.
Instead of a $330 transfer tax bill at closing, now it’s $1,530 for a $300,000 home.”
Currently, when property is sold or transferred, the county of Los Angeles and the city of Inglewood split $1.10 in half, each getting $.55. If voters approve the measure on April 2, Inglewood’s portion of the transfer tax will increase from $0.55 to $4, making it among the highest in Los Angeles County’s 88 incorporated cities. Only five other cities have a property transfer rate of more than $0.55 per $1,000 of assessed value, according to the ballot initiative. The tax will generate an estimated $1.1 million to help reduce an expected 2012-2013 budget shortfall of approximately $4.3 million.
If the measure is approved by voters, the city of Inglewood will then receive $4 and the County will receive Inglewood’s $.55 along with its original $.55, increasing the County take to $1.10. And the total property transfer tax then becomes $5.10 per $1,000 of accessed property value. [Both Los Angeles and Culver City have rates of $5.60 per $1,000.]
The Council’s Tuesday, Dec. 18, meeting was interrupted when a fire alarm went off. The meeting reconvened on Wednesday, Dec. 19, and members voted to put the tax measure on the ballot.