SR 07-12-2022 11A
City Council
Report
City Council Meeting: July 12, 2022
Agenda Item: 11.A
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department
Subject: Adoption of a Resolution to place a Real Property (Documentary) Transfer
Tax revenue measure on the November 2022 Ballot.
Recommended Action
Staff recommends that the City Council:
1. Adopt a resolution to place a transfer tax measure and advisory measure on the
November 8, 2022 ballot (Attachment A), which would:
a) Amend Chapter 6.96 of the Santa Monica Municipal Code to establish an
additional third tier transfer tax rate of $15 per thousand dollars of
consideration or property value transferred, which would apply solely to
the amount of consideration or value transferred in excess of $8 million,
subject to certain exemptions, and be collected in addition to existing
transfer tax rates that apply to the entire transfer amount; and
b) Allow voters to express their preference that if the Comprehensive Real
Property Transfer Tax Measure is adopted, funds should be used to fund:
(a) services to address homelessness and mental health, (b) public safety
and emergency response teams to address safety issues on City streets
and in parks, (c) the reopening and staffing of all public libraries, (d) after-
school and post-COVID recovery programs for public school children, (e)
traffic safety improvements around schools, including crossing guards,
and (f) transitional housing and shelters; and
c) Identify Council Members, if any, who wish to prepare arguments for or
against each measure; and
d) Direct the City Attorney to prepare an impartial analysis of each measure.
Summary
At the May 24, 2022 Budget Study session, Council directed staff to study a revenue
measure to place on the November 8, 2022 ballot that would increase the City’s Real
Property Transfer Tax, which is contained in Chapter 6.96 of the Santa Monica
Municipal Code. The proposed measure (“Transfer Tax Measure”) would create an
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additional third tier real property transfer tax rate of $15 per thousand dollars of
consideration or property value transferred, which would apply solely to the amount of
consideration or value in excess of $8 million, subject to certain exemptions. The
existing second tier tax rate of $6 per thousand dollars of consideration or property
value transferred would continue to be collected on all transfers over $5 million.
Applying the proposed third tier tax rate to transfers from the last four calendar years
and through May 2022 would have generated additional revenue ranging from $6 million
to $15 million per year (including the estimated impact from the new proposed
exemptions). As the wide range indicates, this tax source can be very volatile based on
market conditions and can be skewed by occasional extraordinarily high value transfers.
The proposal includes an Advisory Measure that, if the Transfer Tax Measure passes,
would direct the additional funds raised to services to address homelessness and
mental health, public safety and emergency response teams to address safety on City
streets and in parks, the reopening and staffing of all public libraries, after-school and
post-COVID recovery programs for public school children, traffic safety improvements
around schools, including crossing guards, and transitional housing and shelters.
The proposed resolution, including the text of the Transfer Tax Measure and the text of
the Transfer Tax Advisory Measure, is attached (Attachment A).
In November 2020, Santa Monica voters approved Measure SM which established the
second tier rate, effective March 1, 2021. Measure SM has contributed approximately
$6.6 million to City revenues since its implementation. The City’s Real Property
Transfer Tax is currently structured as follows:
Tier Rate Applies to
1 $3/ $1,000 of consideration or property
value
Sales < $5 million
2 $6/ $1,000 of consideration or property
value
Sales ≥ $5 million
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This is in addition to the County’s rate of $1.10/ $1,000 of consideration or property
value.
The City’s Real Property Documentary Transfer Tax currently has two categories of
exemptions:
• Exemptions that align with state law exemptions found in Revenue & Taxation Code,
Division 2, Part 6.7, Chapter 3, including §§ 11921-11925 therein. See S.M.M.C. §§
6.96.040 (deeds to secure debts), 6.96.050 (transfers to governmental agencies),
6.96.060 (corporate reorganizations), 6.96.070 (transfers pursuant to SEC orders),-
6.96.080 (transfers of certain partnership interest)
• A partial exemption for Affordable Housing Transfers. This partial exemption applies
if the property transfer is to: (1) a nonprofit corporation; (2) a limited partnership or
limited liability company in which a nonprofit corporation is the managing general
partner or managing member; or (3) a community land trust. A taxpayer making an
Affordable Housing Transfer who receives prior approval from the City is not
required to pay the second tier tax to the City, but must pay the first tier tax rate on
the entire transfer amount. Alternatively, a taxpayer making an Affordable Housing
Transfer subject to the second tier tax may seek a refund of the tax paid that
exceeds the first tier tax rate.
There is a voter initiative entitled “Funding for Homelessness Prevention, Affordable
Housing, and Schools” that also includes a proposed real property transfer tax measure
and has received sufficient signatures to be placed on the November 8 ballot. If both
measures appear on the ballot and are approved by 50% + 1 of the voters, the measure
with the greatest number of votes would be enacted.
If the Advisory Measure associated with the Transfer Tax Measure passes, it provides
an indication of general voter opinion on the proposed uses outlined in the Advisory
Measure, but it is not controlling. If the Advisory Measure passes and the Transfer Tax
Measure does not, there will be no change to existing policy.
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Discussion
At the May 24, 2022 Council meeting, Council directed staff to study the viability of
placing a measure on the November 8, 2022 ballot that would add a third tier to the
City’s Real Property (Documentary) Transfer Tax on the portion of transfers valued over
$8 million and return to Council with the results of the study. The Council noted that the
tax would provide a way to increase the City resources available to address critical
issues identified during budget discussions. The proposed measure would be a general
tax, requiring a simple majority to pass (50% + 1 vote).
Proposal Details
The proposal would add a third tier tax rate to Santa Monica’s Real Property Transfer
Tax as detailed below:
Tier Rate Applies to
3 $15/ $1,000 of consideration or property
value
Sales > $8 million on the
amount of the sale over $8
million, with the threshold
adjusted every five years by CPI
The third tier tax rate of $15/$1,000 on the increment over $8 million would be charged
in addition to the current Tier 2 rate of $6/$1,000, which is generally applicable to the
entire transaction amount for transfers of $5 million or more. The proposed measure
further notes that the threshold amount for the third tier would be adjusted every five
years by the consumer price index (CPI) for the Los Angeles-Long Beach-Anaheim
area. This would essentially increase the threshold amount. Depending on the
escalation rate of property sale values during each five year period, which are subject to
a number of factors other than inflation, such as interest rates and the overall real estate
market, the adjustment could have the effect of decreasing the number of property
transfers subject to the third tier, and could negatively impact the ultimate revenue
generated by the tax.
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Charter cities in California have the right to assess a tax on the transfer of real property
that deviates from the tax rates that general law cities cannot exceed. Santa Monica is
one of five cities in Los Angeles County to levy a documentary transfer tax in addition to
the County tax of $1.10/$1,000. However, a number of charter cities in Northern
California levy the transfer tax at rates significantly higher than the current Santa
Monica rate. The proposal in the Transfer Tax Measure is still below those of other
cities, as shown in the table below. Except for Culver City, these cities assess the
higher rates on the full sale price.
City Rates ($/ $1,000)
Santa Monica
(current)
• $3 on sales < $5 million
• $6 on sales ≥ $5 million (with exceptions)
Santa Monica
(proposed)
• $3 on sales < $5 million
• $6 on sales ≥ between $5-$8 million (with exceptions)
• $21 on the amount > $8 million (with exceptions)
Berkeley • $15 on sales up to $1.5 million
• $25 on sales >$1.5 million
Oakland • $10 on sales up to $0.3 million
• $15 on sales between $0.3-$2 million
• $17.50 on sales between $2-$5 million
• $25 on sales > $5 million
San Jose • Exempt <$2 million
• $7.50 on sales between $2-$5 million
• $10 on sales between $5-$10 million
• $18 on sales >$10 million
San Francisco • $5 on sales up to $0.25 million
• $6.80 on sales between $0.25-$1 million
• $7.50 on sales between $1-$5 million
• $22.50 on sales between $5-$10 million
• $55 on sales between $10-$25 million
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• $60 on sales >$25 million
Culver City • $4.50 on sales up to $1.5 million
• $15 on the amount between $1.5-$3 million
• $30 on the amount between $3-$10 million
• $40 on the amount >$10 million
City of Los Angeles • $4.50
The Transfer Tax Measure includes other general exemptions per State law, and
additional partial exemptions to the proposed third tier tax (listed below), which would be
in addition to existing exemptions. Staff reviewed exemptions in comparison cities’
codes related to transfer tax. Of the cities shown here, only San Francisco, Culver City,
and Santa Monica have policy-related exemptions (beyond those consistent with State
law or to ensure the tax does not apply to transactions that are procedural or
corrective). Based on a review of four and a half calendar years of transfers, staff
estimates that the exemptions shown below could reduce potential revenues from the
new tax by $0.2 million to $2.0 million in any given year.
# Proposed Santa Monica Third Tier
Exemptions
Cities with Similar Language
1 Exemptions in State law All except Culver City list these
exemptions in various forms
2 Transfers to a non-profit for affordable
housing
Santa Monica has similar language in its
Municipal Code related to Tier 2.
San Francisco has a partial exemption for
rent-restricted affordable housing
3 A deed to correct a previously recorded
defective deed
City of Oakland
4 Transfers that relate only to a change in
the way in which the title is held
City of Oakland, City of San Francisco
5 Transfers to or from a tax-exempt
charitable organization
None
6 First transfer of a newly constructed
residential property having at least four
Culver City has an exemption for transfer
of real property that contains four or more
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units dwelling units designed for permanent
residential occupancy, including
accessory dwelling units, and meets the
following conditions:
a) At least one (1) or more of the
dwelling units was newly
constructed within the last five (5)
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);
b) The newly constructed dwelling
units must have resulted in a net
increase in the total number of
dwelling units on the real property;
and
c) The transfer of real property is the
first transfer following the issuance
of the certificate of occupancy for
such newly constructed dwelling
units.
7 Transfers of owner-occupied residential
housing with no more than three units,
whether or not any other portion of the
property is also rented, if the seller has
occupied the property for at least two years
None
8 Ground leases having a remaining term of
less than 35 years
San Francisco has a similar exemption:
for any deed, instrument or writing which
creates, terminates, or transfers a
leasehold interest having a remaining
term (including renewal options) of less
than 35 years.
The Transfer Tax Measure would be effective March 1, 2023 until repealed. The
Transfer Tax Measure does not contain a sunset clause.
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The proposed measure also includes a clarification that “realty sold” includes transfers
that would trigger a change of ownership under Revenue and Taxation Code § 64. This
clarification is revenue neutral and aligns with the County’s existing practice of applying
the City’s transfer tax to unrecorded corporate transactions that constitute a change of
ownership under Revenue and Taxation Code § 64. Lastly, the measure proposes to
delete certain sections and definitions from Measure SM relating to the City’s
administration of the second tier tax, if the County of Los Angeles did not agree to
administer the City’s second tier tax. The County has entered into a binding agreement
to administer the City’s second tier tax and staff expects that the County will administer
the proposed third tier tax rate.
Staff Analysis
Staff reviewed the proposed Documentary Transfer Tax measure for reasonableness
and to project likely revenue associated with its passage.
Based on averages of the last four calendar years and 2022 year-to-date, approximately
5% of parcels sold in Santa Monica have a value of $8 million or more, generating about
42% of the taxes collected.
Year # Transfers
>$8 million
Additional Revenue
($ in millions)
2018 28 $15.2
2019 42 $13.1
2020 31 $6.3
2021 53 $7.2
2022 (through May) 21 $7.6
Staff estimates that such a measure could generate approximately $6 to $15 million
(including the impact of the proposed new exemptions) annually based on historical
trends. Transfer receipts can vary widely from year to year based on transactions that
occur during any year as well as economic conditions. The projected range
demonstrates this volatility.
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If Council approves the recommended actions associated with this report, City staff will
proceed with placing this measure on the November 2022 ballot. The recommended
ballot language is as follows:
Comprehensive Real Property Transfer Tax Measure
Shall the measure to enhance the City of Santa Monica’s general governmental
services by increasing the one-time tax on real property sales over $8 million,
and establishing an additional incremental tax of $15.00 per $1000 of the value in
excess of $8 million, excepting transfers: per State law, involving tax-exempt
charitable organizations, newly constructed residential properties, owner-
occupied residential housing, and certain ground leases; providing an estimated
$6-15 million annually until repealed, be adopted?
The Council has also proposed an advisory measure to guide spending of additional
resources if the measure passes. The text is below and included in Attachment A:
Comprehensive Real Property Transfer Tax Measure-Advisory Measure
“MEASURE __: ADVISORY VOTE ONLY: If the “Comprehensive Real Property
Transfer Tax Measure” is enacted, should its additional revenue be used to fund:
(a) services to address homelessness and mental health; (b) public safety and
emergency response teams to address safety issues on City streets and in
parks, (c) the reopening and staffing of all public libraries, (d) after-school and
post-COVID recovery programs for public school children, (e) traffic safety
improvements around schools, including crossing guards, and (f) transitional
housing and shelters?”
The advisory measure would appear on the ballot along with the Transfer Tax Measure.
The advisory measure would pass if it receives the required 50% + 1 vote.
The proposed resolution (Attachment A) includes the text of the Transfer Tax Measure
and the text of the Transfer Tax Advisory Measure and authorizes designated City
Council members to submit arguments and rebuttals concerning each measure.
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Council may designate one to five members to submit arguments and rebuttals for each
measure. Finally, the resolution directs the City Clerk to transmit a copy of the
measures to the City Attorney and directs the City Attorney to prepare an impartial
analysis of the effects of each measure on the existing law as well as on the operation
of each measure.
Arguments and rebuttals for each measure shall be submitted in accordance with State
Elections Code Sections 9280-9287 and Santa Monica Municipal Code Section
11.04.125. The Elections Official will set the deadline for submitting arguments as 14
days from the date the election is called on each measure and the deadline for
submitting rebuttals to arguments as 10 days after the deadline for submitting
arguments on each measure.
Financial Impacts & Budget Actions
The cost of placing the measure on the ballot will be covered by the FY 2022-23
election budget. Staff expects that voter approval of the Documentary Transfer Tax
measure would increase General Fund revenues by approximately $6-$15 million per
year. This estimate does not account for the impact of the inflation adjustments applied
to the threshold levels every five years, which could negatively impact revenue
generation from this measure, as noted above.
Prepared By: Gigi Decavalles-Hughes, Director
Approved
Forwarded to Council
Attachments:
A. Resolution Document Transfer Tax
B. Exhibit 1 Tax Measure Text
C. Exhibit 2 Advisory Measure Text
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City Council Meeting: July 12, 2022 Santa Monica, California
RESOLUTION NUMBER _____ (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
SUBMITTING TO THE VOTERS A MEASURE TO AMEND CHAPTER 6.96 OF THE
SANTA MONICA MUNICIPAL CODE TO ESTABLISH A THIRD TIER TAX RATE OF FIFTEEN DOLLARS PER THOUSAND DOLLARS OF CONSIDERATION FOR REAL PROPERTY VALUE TRANSFERRED IN EXCESS OF EIGHT MILLION DOLLARS, ACCOMPANIED BY AN ADVISORY MEASURE ASKING WHETHER
POTENTIALLY INCREASED REVENUES FROM ESTABLISHING A THIRD TIER
REAL PROPERTY TRANSFER TAX SHOULD BE SPENT ON HOMELESS AND MENTAL HEALTH SERVICES, PUBLIC SAFETY AND EMERGENCY RESPONSE SERVICES, LIBRARY SERVICES, AFTER-SCHOOL PROGRAMS, TRAFFIC SAFETY IMPROVEMENTS, AND TRANSITIONAL HOUSING AND SHELTERS,
AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY NOVEMBER 8, 2022, AND AUTHORIZING CITY COUNCILMEMBERS TO FILE WRITTEN ARGUMENTS FOR OR AGAINST THE MEASURES AND DIRECTING THE CITY ATTORNEY TO PREPARE IMPARTIAL ANALYSES OF THE MEASURES
WHEREAS, on November 28, 1967, the City Council of the City of Santa Monica
adopted Ordinance No. 761 (CCS), which established the Real Property Transfer Tax
Ordinance of the City of Santa Monica (the “City Real Property Transfer Tax”), and set
a real property transfer tax rate at $0.55 per $1,000 of consideration or property value
transferred; and
WHEREAS, on August 13, 1991, the City Council adopted Ordinance No. 1596
(CCS), which, among other things, amended the City Real Property Transfer Tax to
establish a real property transfer tax rate of $3.00 per $1,000 of consideration or property
value transferred; and
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WHEREAS, on November 3, 2020, the voters approved Measure SM, which
established a Second Tier Tax Rate of $6.00 per $1,000 of consideration or property
value transferred for all sales or transfers of $5,000,000 or greater; and
WHEREAS, many residents live in the City of Santa Monica because the City
invests in community priorities, offers extensive services and programs that substantially
enhance the quality of life of its residents; and
WHEREAS, an additional locally-controlled revenue source is needed to restore
and enhance Santa Monica’s essential city services; and
WHEREAS, establishing a new Third Tier Tax Rate of an additional $15.00 per
$1000 of consideration or property value transferred, which would apply solely to the
amount of consideration or value in excess of $8,000,000, would partially fill the revenue
gap created by COVID-19 and help restore and enhance Santa Monica’s essential city
services; and
WHEREAS, a number of charter cities have real property transfer taxes that
exceed the proposed Third Tier Tax Rate; and
WHEREAS, on average over the last four calendar years and through May 2022,
approximately 5% of sales and transfers in the City involved properties with a valuation
of $8,000,000 or more; and
WHEREAS, the County of Los Angeles (“County”) and the City have entered into
a binding agreement to administer the Second Tier Tax; and
WHEREAS, the County currently applies the City Real Property Transfer Tax to
unrecorded corporate transactions when a change of control under Revenue & Taxation
Code § 64 is reported to the County as legally required; and
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WHEREAS, the County currently administers a progressive real property transfer
tax for Culver City that applies different incremental tax rates according to the amount
of the total transaction; and
WHEREAS, the revenue from the proposed increase to the City Real Property
Transfer Tax may be used to fund general governmental services, such as: (a) services
to address homelessness and mental health; (b) public safety and emergency response
teams to address safety issues on City streets and in parks, (c) the reopening and
staffing of all public libraries, (d) after-school and post-COVID recovery programs for
public school children, (e) traffic safety improvements around schools, including crossing
guards, and (f) transitional housing and shelters as provided in an accompanying
advisory measure; and
WHEREAS, under applicable law, to be approved the City Council of the City of
Santa Monica must present a proposed increase to the City Real Property Transfer Tax
to the electorate of the City of Santa Monica for adoption by majority vote of the
electorate; and
WHEREAS, pursuant to California Elections Code Section 10403, the City
Council has previously requested that the County of Los Angeles consent and agree to
the consolidation of all aspects of a General Municipal Election with the Statewide
General Election scheduled for Tuesday, November 8, 2022, for the purpose of electing
members of the Santa Monica City Council, the Santa Monica Rent Control Board, the
Santa Monica-Malibu Unified School District, and the Santa Monica College Community
College District.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
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DOES RESOLVE AND PROCLAIM AS FOLLOWS:
SECTION 1. At the General Municipal Election called for November 8, 2022, the
following measure shall be submitted to the qualified electors of the City of Santa
Monica:
MEASURE " ":
Shall the measure to enhance the City of Santa Monica’s general governmental services by increasing the one-time tax on real property sales over $8 million,
and establishing an additional
incremental tax of $15.00 per $1000 of the value in excess of $8 million, excepting transfers: per State law, involving tax-exempt charitable
organizations, newly constructed
residential properties, owner-occupied residential housing, and certain ground leases; providing an estimated $6-15 million annually until repealed, be
adopted?
YES ________
NO _________
SECTION 2. At the General Municipal Election called for November 8, 2022, the
following advisory question shall be submitted to the qualified electors of the City of
Santa Monica:
MEASURE " ": ADVISORY VOTE ONLY: If the “Comprehensive Real Property Transfer
Tax Measure” is enacted, should its
additional revenue be used to fund: (a) services to address homelessness and mental health; (b) public safety and emergency response teams to address
safety issues on City streets and in
YES ________
NO _________
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parks, (c) the reopening and staffing of
all public libraries, (d) after-school and post-COVID recovery programs for public school children, (e) traffic safety improvements around schools, including
crossing guards, and (f) transitional
housing and shelters?
SECTION 3. The City Clerk shall file a certified copy of this resolution with the
Board of Supervisors and with the county election department of the County of Los
Angeles.
SECTION 4. The City of Santa Monica recognizes that additional costs may be
incurred by the County by reason of the addition of these measures to the ballot and agrees
to reimburse the County for any additional costs.
SECTION 5. The City Clerk shall transmit to the City Attorney, in accordance with
applicable law, copies of both measures. The City Attorney shall prepare an impartial
analysis of the measures, which shall not exceed 500 words in length each. The impartial
analyses shall be filed by the date set by the City Clerk for the filing of primary arguments.
ln accordance with applicable law, not less than 10 calendar days before the City Clerk
submits the official election materials for printing, the City Clerk shall make a copy of all
applicable elections materials available for public examination in the City Clerk's office.
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SECTION 6. The City Council authorizes its members, as follows, to file written
arguments for or against the measures described above, which are contained in Exhibit 1
(Transfer Tax Measure) and Exhibit 2 (Transfer Tax Advisory Measure), which Exhibits are
incorporated by reference herein:
Transfer Tax Measure
FOR:
AGAINST:
Transfer Tax Advisory Measure
FOR:
AGAINST:
All written arguments filed by any person in favor of or against any measure, including
any rebuttal arguments, shall be accompanied by the names and signatures of the persons
submitting the argument as required by applicable law, and any names, signatures and
arguments may be filed until the time and date fixed by the City Clerk in accordance with
applicable law, after which no change may be submitted to the City Clerk unless permitted
by law.
SECTION 7. The City Clerk shall cause the text of the measures, which is contained
in Exhibit 1 (Transfer Tax Measure) and Exhibit 2 (Transfer Tax Advisory Measure), together
with the City Attorney impartial analyses, and any arguments for or against the measures,
as well as any rebuttal, to be mailed to all qualified voters with the sample ballot. In addition
to other notices and publications required by law, the City Clerk, not less than forty (40) days
and not more than sixty (60) days before the General Municipal Election, shall cause the
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text of the measures to be published once in the official newspaper and in each edition
thereof during the day of publication. The City Clerk is authorized to give such notices and
to fix such times and dates as are required by law or which are appropriate to conduct
properly the election.
SECTION 8. The provisions of Resolution Numbers 11425 and 11426 are referred
to and incorporated into this resolution for more particulars concerning the conduct of the
General Municipal Election to be held on November 8, 2022, and in all respects the election
shall be held and conducted as provided for by applicable law. The City Clerk is authorized
and directed to procure and furnish any official ballots, notices, printed materials and all
supplies or equipment that may be necessary in order to properly and lawfully conduct the
election.
SECTION 9. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
______________________ DOUGLAS T. SLOAN
City Attorney
Exhibit 1 – Text of Transfer Tax Measure
Exhibit 2 – Text of Transfer Tax Advisory Measure
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EXHIBIT 1
CITY COUNCIL PROPOSED MEASURE TO AMEND CHAPTER 6.96 OF THE SANTA MONICA MUNICIPAL CODE TO ESTABLISH A THIRD TIER REAL PROPERTY TRANSFER TAX RATE OF FIFTEEN DOLLARS PER THOUSAND DOLLARS OF
CONSIDERATION OR PROPERTY VALUE TRANSFERRED APPLICABLE SOLELY
TO THE AMOUNT OF VALUE TRANSFERRED IN EXCESS OF EIGHT MILLION DOLLARS
WHEREAS, this measure shall be known as the “Comprehensive Real Property
Transfer Tax Measure” (“Measure”); and
WHEREAS, on November 28, 1967, the City Council of the City of Santa Monica
adopted Ordinance No. 761 (CCS), which established the Real Property Transfer Tax
Ordinance of the City of Santa Monica (the “City Real Property Transfer Tax”), and set
a real property transfer tax rate at $0.55 per $1,000 of consideration or property value
transferred; and
WHEREAS, on August 13, 1991, the City Council adopted Ordinance No. 1596
(CCS), which, among other things, amended the City Real Property Transfer Tax to
establish a real property transfer tax rate of $3.00 per $1,000 of consideration or property
value transferred; and
WHEREAS, on November 3, 2020, the voters approved Measure SM, which
established a Second Tier Tax Rate of $6.00 per $1,000 of consideration or property
value transferred for all sales or transfers of $5,000,000 or greater; and
WHEREAS, many residents live in the City of Santa Monica because the City
invests in community priorities, offers extensive services and programs that substantially
enhance the quality of life of its residents; and
WHEREAS, an additional locally-controlled revenue source is needed to restore
and enhance Santa Monica’s essential city services; and
WHEREAS, establishing a new Third Tier Tax Rate of an additional $15.00 per
11.A.b
Packet Pg. 251 Attachment: Exhibit 1 Tax Measure Text [Revision 5] (5196 : Adoption of resolution for Real Property (Documentary) Transfer Tax revenue
EXHIBIT 1
$1000 of consideration or property value transferred, which would apply solely to the
amount of consideration or value in excess of $8,000,000, would partially fill the revenue
gap created by COVID-19 and help restore and enhance Santa Monica’s essential city
services; and
WHEREAS, a number of charter cities have real property transfer taxes that
exceed the proposed Third Tier Tax Rate; and
WHEREAS, on average over the last four calendar years and through May 2022,
approximately 5% of sales and transfers in the City involved properties with a valuation
of $8,000,000 or more; and
WHEREAS, the County of Los Angeles (“County”) and the City have entered into
a binding agreement to administer the Second Tier Tax; and
WHEREAS, the County currently administers a progressive real property transfer
tax for the City of Culver City that applies different incremental tax rates according to the
amount of the total transaction; and
WHEREAS, the revenue from the proposed increase to the City Real Property
Transfer Tax may be used to fund general governmental services, such as: (a) services
to address homelessness and mental health; (b) public safety and emergency response
teams to address safety issues on City streets and in parks, (c) the reopening and
staffing of all public libraries, (d) after-school and post-COVID recovery programs for
public school children, (e) traffic safety improvements around schools, including crossing
guards, and (f) transitional housing and shelters, as provided in an accompanying
advisory measure; and
WHEREAS, under applicable law, the City Council of the City of Santa Monica
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Packet Pg. 252 Attachment: Exhibit 1 Tax Measure Text [Revision 5] (5196 : Adoption of resolution for Real Property (Documentary) Transfer Tax revenue
EXHIBIT 1
must present a proposed increase to the City Real Property Transfer Tax to the
electorate of the City of Santa Monica for adoption by majority vote of the electorate.
NOW, THEREFORE:
SECTION 1. Chapter 6.96 of the Santa Municipal Code is amended to read as
follows:
6.96.010 Title.
This Chapter shall be known as the “Real Property Transfer Tax Ordinance of the
City of Santa Monica.” It is adopted pursuant to the authority contained in Part 6.7
(commencing with Section 11901) of Division 2 of the Revenue and Taxation Code of the
State of California and other authority held as a charter city.
6.96.015 Definitions.
For purposes of this Chapter, the following terms shall have the following
meanings:
(a) “Affordable Housing Transfer” shall mean a transfer of property to: (1) a
nonprofit corporation; (2) a limited partnership or limited liability company in which a
nonprofit corporation is the managing general partner or managing member; or (3) a
community land trust (as defined by Revenue and Taxation Code Section 402.1) and
operated in accordance with Revenue and Taxation Code Section 214.18, if the property
is subject to a binding agreement or covenant recorded on the real 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;
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(b) “City” shall mean the City of Santa Monica;
(c) “City Collected Portion” shall mean, with respect to any Second Tier Tax
owed, one-half of that Second Tier Tax;
(dc) “County” shall mean the County of Los Angeles;
(e) “County Collected Portion” shall mean, with respect to any Second Tier Tax
owed, one-half of that Second Tier Tax;
(fd) “First Tier Tax” shall mean the City-imposed tax pursuant to this Chapter to
be paid at the First Tier Tax Rate on any sale or transfer within the City;
(ge) “First Tier Tax Rate” shall mean the tax rate of three dollars for each one
thousand dollars of consideration or property value, or fractional part thereof, which tax
rate is equivalent to the tax rate that shall remain in effect prior to March 1, 2021;
(f) “Realty Sold” includes but is not limited to, any acquisition, sale, or transfer
of ownership interests in a legal entity that would be a change of ownership of the entity’s
real property under California Revenue and Taxation Code § 64;
(hg) “Second Tier Tax” shall mean the City-imposed tax pursuant to this
Chapter to be paid at the Second Tier Tax Rate on any sale or transfer within the City;
(i) “Second Tier Tax Agreement” shall mean a fully executed and binding
agreement between City and County that requires the County to administer the entirety
of the Second Tier Tax;
(jh) “Second Tier Tax Rate” shall mean the tax rate of six dollars for each one
thousand dollars of consideration or property value, or fractional part thereof.
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(i) “Third Tier Tax” shall mean the City-imposed tax pursuant to this Chapter
to be paid at the Third Tier Tax Rate on any sale or transfer within the City.
(j) “Third Tier Tax Rate” shall mean the additional incremental tax of fifteen
dollars for each thousand dollars of consideration or property value, or fractional part
thereof, applied solely to the amount of consideration or value that exceeds $8,000,000.
6.96.020 Transfers affected and amount of tax.
Effective March 1, 20212023, there is hereby imposed on each deed, instrument,
or writing by which any lands, tenements, or other realty Realty sold Sold within the City
shall be granted, assigned, transferred or otherwise conveyed to, or vested in, the
purchaser or purchasers, or any other person or persons, by his, her or their direction,
when the consideration or value of the interest or property conveyed (exclusive of the
value of any lien or encumbrance remaining thereon at the time of sale) exceeds one
hundred dollars, a tax at the rates set forth below:
(a) For sales or transfers when the consideration or value of the interest or
property conveyed is less than five million dollars$5,000,000, the First Tier Tax Rate; and
(b) For sales or transfers when the consideration or value of the interest or
property conveyed is greater than or equal to five million dollars$5,000,000, the Second
Tier Tax Rate.
(c) For sales or transfer when the consideration or value of the interest or
property conveyed is greater than eight million dollars, the Second Tier Tax Rate on the
entire amount of consideration or value plus the Third Tier Tax Rate on the portion of
consideration or value that exceeds $8,000,0000.
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Prior to March 1, 20212023, the tax at the First Tier Tax Rate and Second Tier Tax
Rate, as applicable, the rate of three dollars for each one thousand dollars of
consideration or property value, or fractional part thereof, shall remain in effect.
6.96.025 CPI Adjustment.
Beginning on March 1, 2028, the City Council is authorized to increase or decrease
the amount of consideration or value subject to the Third Tier Tax Rate by an amount
proportional to the change in the Consumer Price Index for All Urban Consumers, Los
Angeles-Long Beach-Anaheim (“CPI”), as published by the U.S. Department of Labor
Statistic, rounded up to the nearest one thousand dollars ($1,000.00), provided that:
(a) such adjustment shall not lower the applicability of the Third Tier Tax Rate
to transfers when the consideration or value of the interest or property conveyed is less
than $8,000,000; and
(b) any adjustment to the threshold for applying the Third Tier Tax Rate may
not be done more than once per five years after the effective date of this section or within
five years after the most recent CPI adjustment pursuant to this section.
The City Council may implement the CPI adjustment provided by this section by
ordinance. In the event the Bureau of Labor Statistics discontinues the publication of the
CPI, then a comparable statistic shall be used as determined by the Director of Finance.
6.96.030 Taxpayer designated.
Any tax imposed pursuant to Section 6.96.020 hereof shall be paid by: (1) any
person who makes, signs or issues any document or instrument subject to the tax; (2)
any person for whose use or benefit any document or instrument subject to the tax is
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made, signed or issued; or (3) any combination thereof. The obligation to pay any tax
imposed pursuant to Section 6.96.020 shall be a joint and several liability of the taxpayers
identified in this Section.
6.96.035 Payment of First Tier Tax to County, payment of Second Tier Tax to County
and City.
Any taxes due under this Chapter shall be paid prior to recording any deed,
instrument, or writing subject to the tax. Payment shall be made as follows:
(a) Any First Tier Tax owed shall be paid directly to the County on behalf of the
City;
(b) Unless the County enters into a Second Tier Tax Agreement, any Second
Tier Tax owed shall be paid in two equal parts:
(1) The County Collected Portion (three dollars for each one thousand dollars
of consideration or property value, or fractional part thereof) shall be paid to the County
on behalf of the City; and
(2) The City Collected Portion (three dollars for each one thousand dollars of
consideration or property value, or fractional part thereof) shall be paid directly to City.
6.96.036 Payment of entire Second Tier Tax to County upon execution of binding
agreement—Notice.
In the event that the City and County enter into a Second Tier Tax Agreement, the
County is authorized to collect the entirety of the Second Tier Tax as if
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Section 6.96.035(b) did not exist. The City shall provide at least ninety days’ notice of the
effective date of any Second Tier Tax Agreement on its website.
6.96.040 Debt-securing instrument exempted.
Any tax imposed pursuant to this Chapter shall not apply to any instrument in
writing given to secure a debt.
6.96.050 Certain governmental units exempted.
The United States or any agency or instrumentality thereof, any State or territory,
or political subdivision thereof, including any City or County, or the District of Columbia
shall not be liable for any tax imposed pursuant to this Chapter with respect to any deed,
instrument, or writing to which it is a party, but the tax may be collected by assessment
from any other party liable therefor.
6.96.051 Partial exemption for certain affordable housing developments by non-
profit corporations and community land trusts.
For an Affordable Housing Transfer in which the consideration or value of the
interest or property conveyed is greater than or equal to five million dollars, the First Tier
Tax Rate shall apply to the amount of the entire transfer, under the following conditions:
(a) If prior to the time an obligation to collect the City Collected Portion of the
Second Tier Tax or Third Tier Tax arises under Section 6.96.095 of this Chapter, a
taxpayer with respect to the such transfer, as defined in Section 6.96.030 of this Chapter,
obtains from the Director of Finance a certification that the transfer is an Affordable
Housing Transfer, no such taxpayer with respect to the Affordable Housing Transfer shall
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only be required to pay the City collected portion of the Second Tier TaxFirst Tier Tax on
the Affordable Housing Transfer; or
(b) If the City collected portion of the Second Tier Tax or Third Tier Tax is paid
on an Affordable Housing Transfer, any taxpayer with respect to the such transfer, as
defined in Section 6.96.030 of this Chapter, may apply to the Director of Finance for a
refund of that portion of the City collected portion of the Second Tier Tax and Third Tier
Tax, if applicable, paid by the taxpayer on the Affordable Housing Transfer that exceeds
the amount of the First Tier Tax as applied to the Affordable Housing Transfer under this
section; any such application for a refund must be submitted within one hundred twenty
days of the transfer subject to the Second Tier Tax or Third Tier Tax.
6.96.060 Plans of reorganization or adjustment.
Any tax imposed pursuant to this Chapter shall not apply to the making, delivering,
or filing of conveyances to make effective any plan of reorganization or adjustment:
(a) Confirmed under the Federal Bankruptcy Act, as amended;
(b) Approved in an equity receivership proceeding in a court involving a railroad
corporation, as defined in Section 101 of Title 11 of the United States Code, as amended;
(c) Approved in an equity receivership proceeding in a court involving a
corporation, as defined in Section 101 of Title 11 of the United States Code, as amended;
or
(d) Whereby a mere change in identity, form or place of organization is effected.
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Subsections (a) to (d), inclusive, of this Section shall only apply if the making,
delivery or filing of instruments of transfer or conveyances occurs within five years from
the date of such confirmation, approval or change.
6.96.070 Securities and Exchange Commission orders.
Any tax imposed pursuant to this Chapter shall not apply to the making or delivery
of conveyances to make effective any order of the Securities and Exchange Commission,
as defined in subdivision (a) of Section 1083 of the Internal Revenue Code of 1986, but
only if:
(a) The order of the Securities and Exchange Commission in obedience to
which such conveyance is made recites that such conveyance is necessary or
appropriate to effectuate the provisions of Section 79k of Title 15 of the United States
Code relating to the Public Utility Holding Company Act of 1935;
(b) Such order specifies the property which is ordered to be conveyed; and
(c) Such conveyance is made in obedience to such order.
6.96.080 Partnerships.
(a) In the case of any realty held by a partnership, no levy shall be imposed
pursuant to this Chapter by reason of any transfer of an interest in a partnership or
otherwise, if:
(1) Such partnership (of another partnership) is considered a continuing
partnership within the meaning of Section 708 of the Internal Revenue Code of 1986; and
(2) Such continuing partnership continues to hold the realty concerned.
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(b) If there is a termination of any partnership within the meaning of Section
708 of the Internal Revenue Code of 1986, for purposes of this Chapter, such partnership
shall be treated as having executed an instrument whereby there was conveyed, for fair
market value (exclusive of the value of any lien or encumbrance remaining thereon), all
realty held by such partnership at the time of such termination.
(c) Not more than one tax shall be imposed pursuant to this Chapter by reason
of a termination described in subsection (b), and any transfer pursuant thereto, with
respect to the realty held by such partnership at the time of such termination.
6.96.081 Other Exemptions Per State Law.
The tax imposed by this Chapter shall not apply to:
(a) any deed, instrument, or writing to a beneficiary or mortgagee, which is
taken from the mortgagor or trustor as a result of or in lieu of foreclosure; provided, that
such tax shall apply to the extent that the consideration exceeds the unpaid debt,
including accrued interest and cost of foreclosure. Consideration, unpaid debt amount
and identification of grantee as beneficiary or mortgagee shall be noted on said deed,
instrument or writing or stated in an affidavit or declaration under penalty of perjury for tax
purposes; and
(b) any deed, instrument, or other writing which purports to transfer, divide, or
allocate community, quasi-community, or quasi-marital property assets between spouses
for the purpose of effecting a division of community, quasi-community, or quasi-marital
property which is required by a judgment decreeing a dissolution of the marriage or legal
separation, by a judgment of nullity, or by any other judgment or order rendered pursuant
to the Family Code, or by a written agreement between the spouses, executed in
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contemplation of any such judgment or order, whether or not the written agreement is
incorporated as part of any of those judgments or orders; and
(c) any deed, instrument, or other writing which purports to grant, assign,
transfer, convey, divide, allocate, or vest lands, tenements, or realty, or any interest
therein, if by reason of such inter vivos gift or by reason of the death of any person, such
lands, tenements, realty, or interests therein are transferred outright to, or in trust for the
benefit of, any person or entity.
6.96.082 Partial Exemptions to Third Tier Tax Only.
The Third Tier Tax imposed by this Chapter shall not apply to:
(a) a deed without consideration that corrects a deed, provided that such
correction is recorded no later than ninety (90) days after the recordation of the transfer
to be corrected; and
(b) any transfer of real property between an individual or individuals and a legal
entity or between legal entities that results solely in a change in the method of holding
title to the realty and in which proportional ownership interests in the realty, whether
represented by stock, membership interest, partnership interest, cotenancy interest, or
otherwise, directly or indirectly, that remains the same for a minimum of one hundred
(180) days after the transfer. Transfers from a parent corporation to a wholly owned
subsidiary corporation shall likewise by exempt; provided, the beneficial ownership of the
property remains the same; and
(c) a transfer to or from a tax-exempt charitable organization with a valid
501(c)(3) status; and
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(d) a transfer of real property that contains four (4) or more dwelling units
designed for permanent residential occupancy, including accessory dwelling units, and
meets all of the following conditions:
(1). At least one (1) or more of the dwelling units was newly constructed
within the last five (5) 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);
(2). The newly constructed dwelling units must have resulted in a net
increase in the total number of dwelling units on the real property; and
(3). The transfer of real property is the first transfer following the issuance
of the certificate of occupancy for such newly constructed dwelling units; and
(e) a transfer of owner-occupied residential housing with no more than three
units, whether or not any other portion of the property is also rented, provided that the
seller has occupied the property for at least two years immediately prior to the transfer;
and
(f) a ground lease with a remaining term of less than 35 years.
6.96.090 Administration by County Recorder as to First Tier Tax and County
collected portion of Second Tier Tax absent Second Tier Tax Agreement.
The County Recorder shall administer this Chapter in conformity with the
provisions of Part 6.7 of Division 2 of the Revenue and Taxation Code and the provisions
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of any County ordinance adopted pursuant thereto. Until the effective date of a Second
Tier Tax Agreement, the County shall administer and collect: (1) the entirety of any First
Tier Tax; and (2) the County collected portion of any Second Tier Tax. Following the
effective date of a Second Tier Tax Agreement, the County will collect: (1) the entirety of
any First Tier Tax; and (2) the entirety of any Second Tier Tax as provided in the Second
Tier Tax Agreement.
The City Manager is authorized to negotiate, modify, and enter into a contract with
the County or one of its officials for the administration of this Chapter and payment to the
County for its costs of administration.
6.96.095 Administration of City collected portion of Second Tier Tax by recording
party or agent.
Unless a Second Tier Tax Agreement has been executed and the City has
provided at least ninety days’ notice on its website of the effective date of said agreement
in accordance with Section 6.96.036, the City collected portion of any Second Tier Tax
shall be administered as follows:
(a) Any entity (including any escrow company, title company, or taxpayer as
defined in Section 6.96.030, or agent thereof) that records any deed or written instrument
subject to the Second Tier Tax Rate set forth by Section 6.96.020(b) shall be responsible
for ensuring that the City collected portion of the Second Tier Tax is collected and paid
prior to said recording.
(b) Escrow companies that are involved in a property sale or transfer to which
the Second Tier Tax Rate applies shall ensure that either:
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(1) The City collected portion of the Second Tier Tax has been paid to the City
prior to recording any deed or written instrument subject to the Second Tier Tax Rate; or
(2) Funds sufficient to cover the City collected portion of the Second Tier Tax
have been set aside to be distributed to City at the time of recording.
(c) The Director of Finance is authorized to promulgate any rules or regulations
reasonably necessary to administer the City collected portion of the Second Tier Tax, as
well as necessary forms and receipts.
Following the effective date of a Second Tier Tax Agreement, the obligations
imposed by subsections (a) and (b) of this Section 6.96.095 will cease to exist.
6.96.100 Refunds.
Claims for refund of taxes imposed pursuant to this Chapter shall be governed by
the provisions of Chapter 5 (commencing with Section 5096), of Part 9 Division 1 of
the Revenue and Taxation Code of the State of California. The Director of Finance may
issue rules or regulations reasonably necessary to establish and administer a refund
application process (including any necessary forms or declarations) to issue any refunds
due pursuant to the partial exemptions in Section 6.96.051.
6.96.110 Authority of Finance Director.
(a) The Director of Finance is hereby designated as the officer of the City
responsible for maintaining relations with the County for the purpose of administering the
tax imposed under this Chapter and receiving and accounting for the funds collected
thereunder.
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(b) If the County or the entities identified in Section 6.96.095 do not collect or
administer the tax due under this Chapter, or if any tax owed is otherwise unpaid, then
the Director of Finance shall have the power and duty to enforce all of the provisions of
this Chapter. The Director of Finance, designee, or any third-party agent authorized by
the Director of Finance may collect any unpaid tax through any lawful means.
(c) The Director of Finance is authorized to issue any rules and regulations
reasonably necessary to implement and administer this Chapter.
6.96.120 Due dates, delinquencies, penalties, interest, and administrative charges.
The tax imposed under this Chapter is due and payable at the time the deed,
instrument, or writing effecting a transfer subject to the tax is delivered to the County
Recorder. Any such tax is delinquent if unpaid at the time of recordation. In cases where
a transfer is effected but not recorded with the County Recorder within ninety days of
acceptance, all statutes of limitation regarding liability for this tax will be tolled until the
City has actual knowledge of the transfer or recording, at which time the tax, penalties,
and interest on the unrecorded transfer will relate back to the actual transfer date of such
unrecorded transfer. Any unpaid tax pursuant to this Chapter will be a joint and several
liability of all taxpayers, as designated by Section 6.96.030 of this Chapter.
If any tax is not paid prior to becoming delinquent, the Director of Finance may
impose a delinquency penalty of up to ten percent of the amount of the tax due. To the
extent permitted by law, the Director of Finance may establish rules and regulations that
establish an applicable interest rate. The Director of Finance shall have the power to
reduce or waive any penalty or interest applicable under this Chapter so long as such
reduction or waiver is in writing and in compliance with any City-issued rules or regulations
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concerning this Chapter. Any request for reduction or waiver of any penalty or interest
assessed pursuant to this Chapter shall be made in writing no later than thirty days
following the assessment of such penalty or interest.
6.96.130 Declaration or additional records may be required.
The tax imposed by this Chapter shall be paid to the City by the taxpayers referred
to in Section 6.96.030. The Director of Finance shall have the authority as part of any
rules and regulations promulgated by him or her as provided for herein to require that the
payment shall be accompanied by a declaration of the amount of tax due signed by the
person paying the tax or by his or her agent. The declaration shall include a statement of
the value of the consideration on which the tax due was computed. The declaration also
shall identify the property address and deed, instrument or writing effecting the transfer
for which the tax is being paid. The Director of Finance, or designee, may require delivery
of a copy of such deed, instrument or writing whenever reasonably necessary to
adequately identify such writing or to administer the provisions of this Chapter. The
Director of Finance, or designee, may rely on the declaration as to the amount of the tax
due; provided, he or she has no reason to believe that the full amount of the tax due is
not shown on the declaration.
Whenever the Director of Finance, or designee, has reason to believe that the full
amount of tax due is not shown on the declaration or has not been paid, he or she may,
by notice served upon any person liable for the tax, require him or her to furnish a true
copy of his or her records relevant to the value of the consideration or fair market value
of the property transferred. Such notice may be served at any time within three years after
recordation of the deed, instrument or writing which transfers such property.
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6.96.140 Determination of deficiency.
If on the basis of such information as the Director of Finance receives pursuant to
the last paragraph of Section 6.96.130 and/or on the basis of such other relevant
information that comes into his or her possession, he or she determines that the amount
of tax due as set forth in the declaration, or as paid, is insufficient, he or she may
recompute the tax due on the basis of such information.
If the declaration required by Section 6.96.130 is not submitted, the Director of
Finance may make an estimate of the value of the consideration for the property conveyed
and determine the amount of tax to be paid on the basis of any information in his or her
possession or that may come into his or her possession.
One or more deficiency determinations may be made of the amount due with
respect to any transfer.
6.96.150 Notice of determination.
The Director of Finance, or designee, shall give written notice to a person liable
for payment of the tax imposed under this Chapter of his or her determination made under
Section 6.96.140. Such notice shall be given within three years after the recordation of
the deed, instrument or writing effecting the transfer on which the tax deficiency
determination was made.
6.96.160 Manner of giving notice.
Any notice required under this Chapter may be served personally or by mail; if by
mail, service shall be made by depositing the notice in the United States mail, in a sealed
envelope with postage paid, addressed to the person on whom it is to be served at his or
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her address as it appears in the records of City or as ascertained by the Director of
Finance, or designee. The service is complete at the time of the deposit of the notice in
the United States mail, without extension of time for any reason.
6.96.170 Petition for redetermination.
Any person against whom a determination is made under this Chapter or any
person directly interested may petition the Director of Finance for a redetermination within
sixty days after service upon the person of notice thereof. If a petition for redetermination
is not filed in writing with the Director of Finance within the sixty-day period, the
determination becomes final at the expiration of the period.
6.96.180 Consideration of petition for redetermination—Hearing.
If a petition for redetermination is filed within the sixty-day period, the Director of
Finance, or designee, shall reconsider the determination and, if the person has so
requested in his or her petition, shall grant the person an oral hearing, and shall give him
or her ten days’ notice of the time and place of hearing. The Director of Finance may
designate one or more deputies for the purpose of conducting hearings and may continue
a hearing from time to time as may be necessary.
6.96.190 Determination of petition.
The Director of Finance, or designee, may decrease or increase the amount of the
determination before it becomes final, but the amount may be increased only if a claim
for the increase is asserted by the Director of Finance, or designee, at or before the
hearing.
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6.96.200 Finality of determination.
The order or decision of the Director of Finance, or designee, upon a petition for
redetermination becomes final thirty days after service of notice thereof upon the
petitioner or at the time of hearing of redetermination. There is no appeal of the Director
of Finance’s (or designee’s) decision to the City Council; writs challenging the Director’s
decision conveyed by his or her deputies at an administrative hearing must be filed with
the appropriate court within ninety days of the final date of such redetermination.
(California Code of Civil Procedure Section 1094.6.)
6.96.210 Tax a debt.
The amount of any tax, penalties, and interest imposed under the provisions of this
Chapter shall be deemed a debt to the City. Any person owing money to the City under
the provisions of this Chapter shall be liable to an action brought in the City’s name for
the recovery of such amount.
6.96.220 Tax a lien.
The amount of tax, penalties and interest imposed under the provisions of this
Chapter is assessed against the property upon the transfer of which the tax is imposed,
and if not paid when due, such tax shall constitute an assessment against such property
and shall be a lien on the property for the amount thereof, which lien shall continue until
the amount thereof including all penalties and interest are paid, or until it is discharged of
record. Any person owing money to the City under the provisions of this Chapter shall be
liable to an action brought in the name of the City for the recovery of such amount.
6.96.230 Notice of hearing on lien.
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The Director of Finance shall file with the City Manager a written notice of those
persons on whom the City will file liens. Upon the receipt of such notice the City Manager
shall present same to the City Council, and the City Council shall forthwith, by resolution,
fix a time and place for a public hearing to confirm such liens.
The Director of Finance shall cause a copy of such resolution and notice to be
served upon the transferor or transferee of property not less than ten days prior to the
time fixed for such hearing. Such service shall be by mailing a copy of such resolution
and notice to the transferor or transferee of property at his or her last known address.
Service shall be deemed complete at the time of deposit in the United States mail.
6.96.240 Collection of delinquent taxes by special tax roll assessment.
With the confirmation of the lien by the City Council pursuant to the hearing set
forth in Section 6.96.220, the delinquent tax charges contained therein which remain
unpaid by the transferor or transferee shall constitute a special assessment against said
property, and shall be collected at such time as is established by the County Auditor-
Controller for inclusion in the next property tax assessment.
The Director of Finance shall turn over to the County Auditor-Controller for
inclusion in the next property tax assessment the total sum of unpaid delinquent charges
consisting of the delinquent transfer taxes, penalties and interest at the rate of twelve
percent per annum from the date of recordation to the date of lien.
Thereafter, said assessment may be collected at the same time and in the same
manner as ordinary municipal taxes are collected, and shall be subject to the same
penalties and the same procedure of sale as provided for delinquent, ordinary, municipal
taxes. The assessment lien previously imposed upon the property are paramount to all
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other liens except for those of State, County, and municipal taxes with which it shall be
upon parity. The lien shall continue until the assessment and all interest and charges due
and payable thereon are paid. All taxes applicable to the levy, collection and enforcement
of municipal taxes shall be applicable to said special assessments.
6.96.250 Administrative penalties.
Any person violating or failing to comply with any provision of this Chapter may be
subject to any of the penalties set forth in Section 1.08.010 of the Santa Monica Municipal
Code. Each such violation or failure shall constitute a separate offense. Neither the City’s
pursuit of any such penalties nor the imposition of any such penalties shall excuse any
person from the payment, collection or remittance of any tax provided for in this Chapter.
6.96.260 Authority of City Council to establish rules and amend Chapter.
The City Council is authorized to establish by resolution any rules that are
necessary and desirable for implementation of this Chapter. The City Council is
authorized to amend any aspect of this Chapter as long as the amendment does not result
in an increase in the authorized tax rate.
6.96.270 Severability.
If any section, subsection, subdivision, paragraph, sentence, clause or phrase of
this Chapter or any part thereof is for any reason held to be invalid, unlawful or
unconstitutional, such decision shall not affect the validity of the remaining portions of this
Chapter or any part thereof. The City Council hereby declares that it would have passed
each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof,
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EXHIBIT 1
irrespective of the fact that any one or more sections, subsections, subdivisions,
paragraphs, sentences, clauses or phrases be declared unconstitutional.
SECTION 2. Any provision of the Santa Monica Municipal Code inconsistent with
the provisions of this measure, to the extent of such inconsistencies and no further, is
hereby repealed or modified to that extent necessary to effect the provisions of this
measure.
SECTION 3. This Measure adopts a comprehensive real property transfer tax
scheme. By voting for this Measure, the voters expressly declare their intent that any
other measure that appears on the same ballot as this Measure and addresses real
property transfer taxes within the City, or conflicts with any provision of this Measure,
including, without limitation, the “Funding for Homelessness Prevention, Affordable
Housing, and Schools” measure, which shall be deemed to conflict with the scheme
adopted by this Measure. Because of this conflict, if this Measure and any such other
City of Santa Monica measure receive a majority of votes by the voters voting thereon
at the same election, then the measure receiving the most votes in favor shall prevail
and no provision of the other measure shall take effect.
SECTION 4. If any section, subsection, sentence, clause, or phrase of this
measure is for any reason held to be invalid or unconstitutional by a decision of any court
of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this measure. The City Council hereby declares that it would have placed this
measure and the resulting Santa Monica Municipal Code amendment, and the voters
declare that they would have adopted this measure and the resulting Santa Monica
Municipal Code amendment, and each and every section, subsection, sentence, clause,
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EXHIBIT 1
or phrase not declared invalid or unconstitutional, without regard to whether any portion
may be subsequently declared invalid or unconstitutional.
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Packet Pg. 274 Attachment: Exhibit 1 Tax Measure Text [Revision 5] (5196 : Adoption of resolution for Real Property (Documentary) Transfer Tax revenue
EXHIBIT 2 – ADVISORY MEASURE TEXT
CITY COUNCIL PROPOSED ADVISORY MEASURE ASKING WHETHER POTENTIALLY INCREASED REVENUES FROM INCREASING THE CITY REAL PROPERTY TRANSFER TAX BY ESTABLISHING A THIRD TIER TAX RATE ON THE
AMOUNT OF ANY REAL PROPERTY TRANSFER WHICH EXCEEDS $8,000,000
SHOULD BE SPENT ON HOMELESS AND MENTAL HEALTH SERVICES, PUBLIC SAFETY AND EMERGENCY RESPONSE SERVICES, PUBLIC SAFETY AND EMERGENCY RESPONSE SERVICES, LIBRARY SERVICES, AFTER-SCHOOL PROGRAMS, TRAFFIC SAFETY IMPROVEMENTS AROUND SCHOOLS, AND
TRANSITIONAL HOUSING AND SHELTERS
This Advisory Measure Does Not Increase Taxes. It is an Advisory Measure which
states the intent of the Voters in the City of Santa Monica that any increased revenues
from establishing a Third Tier Tax Rate of $15.00 per $1000 of consideration or value,
which would be applied solely to the amount of consideration or real property value
transferred in excess of $8,000,000, as proposed by the “Comprehensive Real Property
Transfer Tax Measure” (the “Transfer Tax Measure”), should be spent on the following
programs and services:
• services to address homelessness and mental health; or
• public safety and emergency response teams to address safety issues on City
streets and in parks; or
• the reopening and staffing of all public libraries; or
• after-school and post-COVID recovery programs for public school children; or
• traffic safety improvements around schools, including crossing guards; or
• transitional housing and shelters
If this Advisory Measure is passed by the Voters and the Transfer Tax Measure does
not pass, there will be no change to existing policy.
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Packet Pg. 275 Attachment: Exhibit 2 Advisory Measure Text [Revision 5] (5196 : Adoption of resolution for Real Property (Documentary) Transfer Tax revenue