While many Culver City voters have already cast their ballots, for those of you who have yet to do so, please consider voting “No” on Measure RE.
The City Council recently added Measure RE to the Nov. 2020 ballot in order to increase the real estate transfer tax in Culver City. A real estate transfer tax is a tax that is paid when residential and commercial properties are sold. The tax is paid directly from the seller’s proceeds at close of escrow. It is calculated on the gross sale price and not on what the seller will net after closing costs and loan pay-offs.
During the City Council debate on Measure RE, Council emphasized that the increased transfer tax will have no impact on properties that are sold for under $1.5 million. This assertion completely glosses over the fact that the tax increase — which is intended to be a permanent source of revenue — will have an adverse financial impact upon many, many sellers of property located in Culver City. The average asking price of a single-family home in Culver City is between $1.75 million to $1.85 million. Currently, the seller of a home that sells for $1.75 million pays $7,875 in transfer taxes. If Measure RE passes, that tax would increase to $10,500, a 33% increase. For a $3 million home, the current transfer tax is $13,500, but under Measure RE, the new transfer tax would be $29,250 — a whopping 116% increase.
If history is any guide, it is more than likely that prices in all Culver City neighborhoods will continue to increase in the future; so, if you believe that an increased transfer tax does not affect you now because your home or business property is worth less than $1.5 million, just wait a few years when you go to sell it. Ten years ago, you could buy a home in Carlson Park for $800,000. At that time, it was inconceivable to think that the same home would sell for twice that price today.
Currently, Culver City already has the highest real estate transfer tax in Los Angeles County. If Measure R passes, our city’s transfer tax will be eight times higher than anywhere else in Los Angeles County, including Beverly Hills, Santa Monica, Manhattan Beach and the City of Los Angeles.
Because of the COVID-19 pandemic, the city is projecting a decrease in its revenue which the City Council has apparently attempted to remedy by putting Measure RE on the ballot. However, by putting this ill-conceived measure up for a vote, Council has demonstrated its indifference to the fact that the pandemic has caused a tremendous amount of suffering for homeowners and business owners throughout the city. Many people have lost their jobs or have seen their income significantly reduced as a result of COVID-19. Many people in our community are contemplating selling their homes because they can no longer afford to live in them. Raising the transfer tax will hurt these people when they can least afford to take the hit.
Measure RE, if passed, will hurt young couples who need to sell small houses in order to accommodate growing families, and it will also hurt seniors on fixed incomes who need to sell their houses now in order to continue providing for themselves in retirement.
While COVID-19 obviously has caused economic uncertainty for Culver City, it is extremely short-sighted to address this temporary crisis with another permanent tax increase on property owners who are also facing severe economic uncertainty. Measure RE does not have a sunset clause and it will not expire when the COVID-19 public health emergency is resolved. A permanent tax increase on families and businesses is the last thing we need during this pandemic. I am voting NO on Measure RE, and I hope that you will join me.
— Dannie Cavanaugh is a real estate broker with over 40 years of experience in the Culver City market. He owns and operates Cavanaugh Realtors, one of the last remaining family-owned real estate firms in Culver City.
The opinions expressed in Letters to the Editor do not reflect the opinions of the Culver City News. If you would like to share your opinion in a future issue, send your letter to firstname.lastname@example.org, and it will be considered for publication. All submitted materials, including Letters to the Editor, will be subject to editing for space, libel, and obscenity.