Measure C and What it Means for You

In November, the residents of the City of Santa Cruz voted to pass Measure C.

What is Measure C?

A larger parcel tax and real estate property tax over 20 years to pay for affordable housing and homelessness services, including programs aimed at preventing homelessness.

What does the passing of Measure C mean for me?

1. In the City of Santa Cruz, there will be an additional parcel tax of $96 per year and will ‘sunset’ in 20 years.(some exemptions apply)  That is a total of $1,920 dollars over the life of the measure.
2. There will also be an additional transfer tax (some exemptions apply) for those selling properties over $1,800,000.

Can I be exempt from the yearly parcel tax?

Yes, there are some exemptions from this yearly tax:

– Seniors aged 65 and older who earn up to 80% of the area median income ($74,360 for a single person in 2025) are exempt from the proposed $96 parcel tax.

• Other home owning households earning up to 60% of the area median income.
• 100% below-market-rate housing developments are exempt.
• Schools and churches are also exempt.

How long will I be responsible to pay this additional tax?

20 years

What if I want to sell my home? I heard I could be responsible for even more tax!

Yes, if you sell your home anywhere in the COUNTY of Santa Cruz (including all of the cities – Scotts Valley, Santa Cruz, Capitola, Watsonville), there already exists a Documentary Transfer Tax of .55 per $500 of the sale price.  To make it easier, let’s say $1.10 per $1,000 sale price.

EXAMPLE:

I sell my house for $2,000,000 (two million dollars)

COUNTY Documentary Transfer Tax would be:

$2,000,000 / $1,000 = 2000

2000 x $1.10 = $2,200

Now, let’s check to see if the CITY Transfer Tax applies.  Yep, it applies to all sales over $1,800,000.  In this case there will be an additional CITY TAX of $5 per $1,000 of the amount OVER the $1,800,000.

EXAMPLE: (using our scenario above)

I sell my house for $2,000,000 (two million dollars)

City Transfer Tax would be

$2,000,000 – $1,801,000 = $199,000

$199,000 / $1000 = 199

199 x $5 = $995

The TOTAL due to both City and County in our example would be: $2,200 + $995 = $3,195

Keep in mind this system is tiered.  So, here are the tiers for the CITY Transfer Tax as reported by the City Attorney, Anthony P. Condotti

The proposed real property transfer tax would be levied on the value of property transferred or sold in excess of $1.8 million, as follows:

– 0.5% tax ($5/$1,000) on the price paid in excess of $1.8 million but less than $2.5 million

– 1% tax ($10/$1,000) on the price paid in excess of $2.5 million but less than $3.5 million

– 1.5% tax ($15/$1,000) on the price paid in excess of $3.5 million but less than $4.5 million

– 2% tax ($20/$1,000) on the price paid in excess of $4.5 million, subject to a cap of $200,000

• No tax would be imposed on the price paid for property transferred that is under $1.8 million
• SOME exemptions apply here too: inheritance, marital transfers, and more. See the City Attorney’s document linked below.

Find the document here:  City Attorney’s Amendment to the Municipal Code (proposed)

Additionally, the transfer tax thresholds will grow with inflation (using the CPI index)

Some helpful info here at the Santa Cruz County Recorder’s Office website:

https://recorder.santacruzcountyca.gov/

And the Tax Collector’s website:

https://www.santacruzcountyca.gov/Departments/TaxCollector/TaxCollectorDivision.aspx

If you’re thinking about selling, or planning for the future, let’s talk.  This is not meant to be tax advice, simply some info to help understand the outcomes of the passing of Measure C.  I recommend speaking with your tax accountant or estate attorney about these potential issues.