The City Council on Monday night directed the city to take steps to prepare a ballot measure to increase the city’s real property transfer tax. If approved by the Council later this month, the proposal would go before the voters in November 2026.
The transfer tax — which has remained unchanged for 33 years — currently stands at 1.3%. Councilmembers said they were inclined to support a flat tax, but the amount was to be determined.
The tax is necessary, councilmembers said, to fund important capital improvement projects. Those items include aging buildings, stormwater management/storm drain infrastructure, and road conditions. The Budget Advisory Committee said in a May 18 memo to the Council that increasing the transfer tax “continues to be the most broad-based and sustainable source for material additional revenue during the window of the [city’s] 10-year projections.”
Piedmont’s budget continues to rely heavily on property-related taxes, including a parcel tax, transfer tax revenue, and growth in assessed property values. Those taxes make up more than 60% of the city’s budget.
The transfer tax is incurred when a property in Piedmont sells and is split between a buyer and a seller. An effort to boost the tax to 1.75% in 2020 narrowly failed.
(An anti-tax measure that qualified for the November ballot could throw a wrench into the city’s budget planning: The state initiative would prohibit charter cities from imposing their own real estate transfer taxes, regardless of whether they are for general or specific purposes. If the measure does end up on the ballot — still a big if — it would eliminate 10% of the city’s budget said Councilmember Tom Ramsey on Monday night.)