If you own a home in California or plan to buy or sell real estate, there is some good news.
California REALTORS® recently came together to oppose AB 736, a bill involving real estate transfer taxes. After thousands of REALTORS® contacted state lawmakers, the bill was stopped from moving forward.
Why does this matter? Because higher transfer taxes could make it more expensive to buy and sell a home in California.
What Is a Real Estate Transfer Tax?
A real estate transfer tax is a tax charged when ownership of a property changes hands.
In simple terms, when a home is sold, the city or county may collect a tax based on the property's sale price or value.
Transfer taxes are different from your yearly property taxes. They are connected to the sale or transfer of real estate.
Depending on where the property is located, there may be county and city transfer taxes. This means the amount you pay can vary depending on the location of the home.
What Was California AB 736?
AB 736 was a California bill dealing with how much local governments could collect through real estate transfer taxes.
The amended bill proposed new limits on transfer taxes beginning in 2027. However, the California Association of REALTORS® raised concerns that putting higher transfer-tax limits into state law could encourage some cities and counties to increase their existing tax rates.
This was especially concerning in a state where buying and selling a home is already expensive.
Could AB 736 Have Increased the Cost of Selling a Home?
That was one of the biggest concerns.
AB 736 would not have automatically raised transfer taxes on every California homeowner. Instead, REALTORS® argued that the bill could have created an opportunity for some local governments to increase their transfer taxes.
For a homeowner selling a higher-priced property, even a small percentage increase could mean thousands of dollars in additional costs.
Those added costs could affect how much money a seller walks away with after closing.
California REALTORS® Took Action
When the California Association of REALTORS® asked its members to speak up, REALTORS® across the state responded quickly.
In just over 24 hours, California REALTORS® made more than 12,000 calls to state legislators asking them to oppose AB 736.
The message was simple: California housing is already expensive. Adding more costs to buying and selling real estate could make homeownership even harder.
The effort worked, and AB 736 was stopped from moving forward.
Why Stopping AB 736 Matters to California Homeowners
Buying or selling a home comes with many expenses.
Sellers may already have real estate commissions, escrow fees, title costs, repairs and other closing expenses. Buyers are dealing with down payments, closing costs, insurance, property taxes and mortgage rates.
Higher real estate transfer taxes could add another expense to an already costly transaction.
Stopping AB 736 helps protect California homeowners from the possibility of these additional transfer-tax increases under this proposal.
REALTOR® Advocacy Is About More Than Selling Homes
This is also a great example of what REALTORS® do behind the scenes.
Our job is not only to help people buy and sell homes. REALTORS® also advocate for homeownership, private property rights and California homeowners.
Many homeowners may never hear about a proposed real estate law until after it passes. REALTOR® organizations monitor legislation and speak up when proposed laws could affect buyers, sellers and property owners.
AB 736 is a good example of REALTOR® advocacy making a difference.
What California Homeowners Should Know Going Forward
AB 736 has been stopped, but real estate laws and taxes can change.
If you are thinking about buying or selling a home in Santa Clarita, Saugus, Valencia, Canyon Country, Newhall, Castaic or Stevenson Ranch, it is important to understand all of the costs involved before you make a move.
Real estate is about more than the purchase price. Taxes, closing costs, insurance, interest rates and local laws can all affect your bottom line.
As a local Santa Clarita REALTOR®, I will continue to keep you updated on California real estate laws and changes that could impact your home, your money and your next move.