Chapter 4.20 — REAL PROPERTY TRANSFER TAX

This chapter may be cited as the real property transfer tax ordinance of the city.

The tax imposed under this Chapter is solely for the purpose of raising income and revenue which is necessary to pay the usual and current expenses of conducting the municipal government of the city.

(Prior code § 5-27.01)

A.

There is imposed a tax on all transfers by deeds, instruments, writings, or any other document, or changes in control and ownership of legal entities, by which any lands, tenements or other interests in real property located in the City, are or is granted, assigned, transferred, or otherwise conveyed to or invested in a transferee, or transferees thereof, which shall be levied as a percentage of the value of consideration at the rates set forth below:

Amount of transfer Tax

$300,000.00 or less 1%

More than $300,000.00 up to $2,000,000.00 1.5%

More than $2,000,000.00 up to $5,000,000.00 1.75%

More than $5,000,000.00 2.5%

B.

The people of Oakland authorize that the City Council may increase the three hundred thousand dollars ($300,000.00) threshold between the first and second tax rate tiers and the two million dollars ($2,000,000.00) threshold between the second and third tax rate tiers by an amount no more than the increase to the Consumer Price Index as published by the U.S. Department of Labor, provided that such a threshold increase may not be done more than once per five (5) years since the effective date of the ordinance from which this Chapter is derived and that the thresholds may not be increased beyond five hundred thousand dollars ($500,000.00) for the threshold between the first and second tiers and three million five hundred thousand dollars ($3,500,000.00) for the threshold between the second and third tiers.

C.

Notwithstanding subsection A., a transfer to a nonprofit corporation, or a limited partnership or limited liability company in which a nonprofit corporation is the managing general partner or managing member, accompanied by a binding agreement or covenant recorded on the 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, shall be taxed at a maximum rate of one and one-half (1.5) percent regardless of the value of consideration.

(Res. No. 87320, § 2, 7-24-2018; Res. No. 81926, § 2, 4-21-2009; Ord. 12264 § 1, 2000: prior code § 5- 27.02)

As used in this Chapter:

"Changes in control and ownership of legal entities" means any direct or indirect acquisition or transfer of ownership interest or control in a legal entity that constitutes a change in ownership or transfer of the real property of the entity under California Revenue and Taxation Code section 64, as such statute reads and is interpreted by the California Board of Equalization on June 3, 2009.

"Person" and "persons" mean any natural person, receiver, administrator, executor, assignee, trustee in bankruptcy, trust, estate, firm, co-partnership, joint venture, club, company, joint stock company, business trust, limited liability company, municipal corporation, political subdivision of the State of California, domestic or foreign corporation, association, syndicate, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit, or otherwise, and the United States or any instrumentality thereof, and any natural person, who as an individual or with a spouse, owns 51 percent or more of the capital stock of a corporation obligated to file a declaration and pay tax pursuant to this Chapter ; and in addition, is a person with the power to control the fiscal decision-making process by which the corporation allocates funds to creditors in preference to its tax obligations under the provisions of this Chapter. A

person as defined herein, who is also an officer or director of a corporation obligated to file declarations and pay tax pursuant to this Chapter , shall be presumed to be a person with the power to control the fiscal decision-making process. Whenever the term "person" is used in any clause prescribing and imposing a penalty, the term as applied to association shall mean the owners or part owners thereof, and as applied to corporation, the officers thereof.

"Real property" and "realty" mean real property as defined by and under the laws of the state of California.

"Value of consideration" means the total consideration, valued in money of the United States, paid or delivered, or contracted to be paid or delivered in return for the transfer of real property, including the amount of any indebtedness existing immediately prior to the transfer which is secured by a lien, deed of trust or other encumbrance on the property conveyed and which continues to be secured by such lien, deed of trust or encumbrances after such transfer, and also including the amount of any indebtedness which is secured by a lien, deed of trust or encumbrance given or placed upon the property in connection with the transfer to secure the payment of the purchase price or any part thereof which remains unpaid at the time of transfer.

"Value of the consideration" also includes the amount of any special assessment levied or imposed upon the property by a public body, district or agency, where such special assessment is a lien or encumbrance on the property and the purchaser or transferee agrees to pay such special assessment or takes the property subject to the lien of such special assessment. The value of any lien or encumbrance of a type other than those which are hereinabove specifically included, existing immediately prior to the transfer and remaining after such transfer, shall not be included in determining the value of the consideration. If the "value of the consideration" cannot be definitely determined, or is left open to be fixed by future contingencies, "value of the consideration" shall be deemed to mean the fair market value of the property at the time of transfer, after deducting the amount of any lien or encumbrance, if any, of a type which would be excluded in determining the "value of the consideration" pursuant to the above provisions of this Section.

Unless a transfer is a "gift", i.e., "free and clear" of liens or encumbrances, it is presumed that the value of consideration of a given property being transferred is the fair market value of that property, unless circumstances supporting a departure therefrom can be furnished to the sole satisfaction of the Director or his or her designee(s).

(Res. No. 81926, § 3, 4-21-2009; Ord. 12264 § 3, 2000: prior code § 5-27.03)

Any persons who make a transfer which is subject to the tax imposed under Section 4.20.020, and any persons to whom such a transfer is made, shall be jointly and severally liable for payment of the tax imposed under said Section 4.20.020; provided, however, that the United States, state of California, any city, county, city and county, district or any other political subdivision of the state of California shall be exempt from any liability for the tax imposed herein.

(Prior code § 5-27.04)

The tax imposed by Section 4.20.020 shall not apply to:

A.

Any transfer made solely to secure a debt. There is an exemption for transfers of partial interests in property to a co-signor or from a co-owner as required pursuant to a verifiable demand by a lender in order to secure the debt for such transfer. Specifically, the subsequent removal or reinstatement of such co- owner or co-signing party(s) must be effected within seven years of the close of escrow pertaining to such loan in order to qualify for the exemption herein. Nothing herein contained shall be deemed to exclude the amount of any such indebtedness from being included in the "value of consideration" pursuant to Section

B.

Transfers to make effective any plan of corporate reorganization or adjustment:

Confirmed under the Bankruptcy Act, as amended,

Approved in an equity receivership proceeding in a court involving a railroad corporation as defined in Section 77(m) of the Bankruptcy Act, as amended,

Approved in an equity receivership proceeding in a court involving a corporation, as defined in Section 106(3) of the Bankruptcy Act, as amended;

C.

Any transfer of property from one spouse to the other in accordance with the terms of a decree of dissolution, legal separation or in fulfillment of a property settlement incident thereto; provided, however, that such property was acquired by the husband and wife or husband or wife prior to the final decree of dissolution. Furthermore, any transfer, if made during the term of the marriage or domestic partnership, between husband and wife or duly registered domestic partners, shall be tax-exempt interspousal transfers. However, no transfer of property to a third party shall be exempt from this tax, despite the existence of a valid court order or settlement agreement.

Notwithstanding the foregoing, a transfer to the other former spouse or partner, after dissolution, of the owner-occupied, single-family residential property that was the primary domicile of the parties shall be eligible for this real property transfer tax exemption, despite the absence of a court-ordered settlement agreement.

For domestic partners, the two parties to the transfer must have on file a valid domestic partnership registration: (a) as administered by the Office of the City Clerk of Oakland, or (b) under existing law and

procedures for the state of California domestic partnership registry, or (c) with the City Clerk or appropriate governmental agency of a jurisdiction that recognizes domestic partnership registration and the City Clerk of the City of Oakland concludes that the registration requirements of that jurisdiction are minimally similar to those currently in effect in Oakland.

If the parties do not own, as joint tenants, the property that is the subject of their dissolution agreement, they must demonstrate that they were living together at the location of the real property in question either at least six months prior to the dissolution of the domestic partners relationship or the entire period of ownership of the transferring partner, whichever is more. This requirement is not subject to waiver notwithstanding the language of subsection (C)(1) of this Section regarding registration.

The parties must provide that portion of their dissolution and property settlement agreement between the domestic partners pertaining to the division or transfer of property, which shall be filed with the Office of the City Clerk. Such copy of such settlement agreement shall be accompanied by an affidavit with verifiable signatures or proof of identity, that the copy is an accurate and authentic reproduction of the final settlement agreement between the parties;

D.

Transfer or transfers, conveyance, lease or sublease without consideration that confirm or correct a deed, provided that such correction is recorded no later than ninety (90) days after the recordation of the transfer to be corrected;

E.

Transfer to or between the United States, state of California, any city, county, city and county, district or any other political subdivision of the state of California and transfer executed pursuant to eminent domain proceedings by the United States, state of California, any city, county, city and county, district or other political subdivision of the state of California;

Any deed, instrument, or other writing by which the state of California, any political subdivision thereof, or agency or instrumentality of either thereof, conveys to a nonprofit corporation realty the acquisition, construction, or improvement of which was financed or refinanced by obligations issued by the nonprofit corporation on behalf of a governmental unit, within the meaning of Section 1.103-1(b) of Title 26 of the Code of Federal Regulations;

F.

Transfers made pursuant to any order by the court in any note and deed of trust or lien foreclosure proceeding or upon execution of a judgment, or a transfer in lieu of foreclosure. In cases of transfers in lieu of foreclosure or foreclosure by junior lien holders to protect their position with respect to that property, a transfer tax shall be set by the amount of any senior liens or notes and deeds of trust on that property that are paid or assumed by the junior note holder;

G.

Transfers recorded prior to the effective date of the ordinance codified in this Chapter;

H.

In the case of real property held by a partnership or other entity treated as a partnership for federal income tax purposes, the tax imposed shall not apply by reason of any transfer of any interest in a partnership or other entity or otherwise, if both of the following occur:

a.

Such partnership or other entity treated as a partnership is considered as a continuing partnership within the meaning of Section 708 of the Internal Revenue Code of 1986,

b.

Such continuing partnership continues to hold the real property concerned.

If there is a termination of any partnership or other entity treated as a partnership within the meaning of Section 708 of the Internal Revenue Code of 1986, for purposes of this Chapter, such partnership or other entity shall be treated as having executed an instrument whereby there was transferred, for fair market value (exclusive of the value of any lien or encumbrance remaining thereon), all realty held by such partnership or other entity at the time of such termination;

Not more than one tax shall be imposed pursuant to this Chapter by termination described in subsection (H)(2) of this Section, and any transfer pursuant thereto, with respect to the real property held by such partnership or other entity treated as a partnership at the time of such termination.

a.

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:

i.

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,

ii.

Such order specifies the property that is ordered to be conveyed,

iii.

Such conveyance is made in obedience to such order;

I.

Any real property that is inherited from a deceased transferor, without consideration, upon the death of such individual, or from that deceased's estate or trust. Transfers from a decedent's estate into a trust for the benefit of the transferee shall likewise be exempt. Upon request of the Agency Director, an affidavit of death certificate, trust documents, or other documents deemed necessary, shall be provided;

J.

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 eighty (180) days after the transfer. Transfers from a parent corporation to a wholly owned subsidiary corporation shall likewise be exempt; provided, the beneficial ownership of the property remains the same;

K.

Transfers, without consideration; provided, the transferee neither conveys an interest therein to a third party nor effects a refinancing for a period of one hundred eighty (180) days after the gift transfer; however, refinancings for the purposes of rehabilitation of the gifted property are not subject to this limitation upon submission of documentation required by the Director or his or her designee(s)

Notwithstanding the foregoing paragraph, transfers, without consideration, of commercial real property, including residential rental property, other than the principal residence of the transferor will be subject to this tax to the extent that the fair market value thereof exceeds one million dollars ($1,000,000.00). In such case, only the amount of the fair market value that exceeds one million dollars ($1,000,000.00) will be taxed.

(Ord. 12466 § 1, 2003: Ord. 12264 §§ 5—24, 2000; Ord. 11835 § 1, 1995; Ord. 11664 § 1, 1993; prior code § 5-27.05)

The Director of Finance of the city (hereinafter in this Chapter referred to as "Director") shall collect the tax imposed under this Chapter and shall otherwise administer this Chapter. He or she may make such rules and regulations not inconsistent with the chapter as he or she may deem reasonably necessary or desirable to administer this Chapter, as well as necessary forms and receipts.

(Prior code § 5-27.06)

fees.

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, and is delinquent if unpaid at the time of recordation thereof. In cases where a transfer is effected but not recorded with the County Recorder within ninety (90) days of

acceptance, all statutes of limitations regarding liability for this tax will be tolled until the city has actual knowledge of the transfer or recordation, at which time the tax on the unrecorded transfer will relate back to the actual transfer date of such unrecorded transfer. Accordingly penalties and interest will accrue back to such date of actual unrecorded transfer and will be the joint and several liability of both the former transferor and current recording transferring party. In the event that the tax is not paid prior to becoming delinquent, a delinquency penalty of ten percent of the amount of the tax due shall accrue. In the event a portion of the tax is unpaid prior to becoming delinquent, the penalty shall only accrue as to the portion remaining unpaid. An additional penalty of fifteen (15) percent shall accrue if the tax remains unpaid on the ninetieth day following the date of the original delinquency. Interest shall accrue at the rate of one percent a month or fraction thereof, on the amount of tax, inclusive of penalties, from the date the tax becomes delinquent to the date of payment. Interest and penalty shall become part of the tax. An administrative charge and a release of lien filing fee in an amount equal to the amount charged by the Alameda County Recorder's Office as set forth in the master fee schedule of the city shall be added to the amount owed for each property approved for a tax lien by the City Council.

(Ord. 12569 § 3, 2004: Ord. 12264 § 25, 2000: prior code § 5-27.07)

The tax on all transfers of real property located in the City made on or after January 1, 2019 in which the buyers are low and moderate income first-time homebuyers shall be levied at the rates set forth in Section

For the purpose of this Section, "low and moderate

income first-time homebuyers" are defined as buyers who:

A.

Earn a maximum of one hundred (100) percent of the median family income for the Oakland Primary Metropolitan Statistical Area, as defined by the U.S. Department of Housing and Urban Development; and

B.

Will occupy the property as their principal residence; and

C.

Are not purchasing the property to be held as tenants in common; and

D.

The value of consideration for the transferred property is two million dollars ($2,000,000.00) or less; and

E.

Have not owned a home in three (3) years prior to the date of purchasing the property; or

Are displaced homemakers. "Displaced homemaker" is defined as an adult individual who has not worked full-time, full-year in the labor force for a number of years but has, during such years, worked primarily without pay to care for the home and family, is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment.

(Res. No. 87320, § 2, 7-24-2018; Ord. 12264 § 27, 2000: prior code § 5-27.07(a))

The tax imposed by this Chapter shall be paid to the Director by the persons referred to in Section

The Director 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 agent. The declaration shall include a statement that the value of the consideration on which the tax due was computed includes all indebtedness secured by liens, deeds of trust, or other encumbrances remaining or placed on the property transferred at the time of transfer, and also includes all special assessments on the property which a purchaser or transferee agrees to pay or which remains a lien on the property at the time of transfer. The declaration shall identify the deed, instrument or writing effecting the transfer for which the tax is being paid. The Director may require delivery to him or her of a copy of such deed, instrument or writing whenever he or she deems such to be reasonably necessary to adequately identify such writing or to administer the provisions of this Chapter. The Director 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 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.

(Ord. 12264 § 29, 2000: prior code § 5-27.08)

If on the basis of such information as the Director receives pursuant to the last paragraph of Section

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 4.20.090 is not submitted, the Director 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.

(Ord. 12264 § 31, 2000: prior code § 5-27.09)

The Director 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 4.20.100. 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.

(Prior code § 5-27.10)

Any notice required to be given by the Director 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 her address as it appears in the records of the city or as ascertained by the Director. 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.

(Prior code § 5-27.11)

Any person against whom a determination is made under this Chapter or any person directly interested may petition the Director for a redetermination within sixty (60) days after service upon the person of notice thereof. If a petition for redetermination is not filed in writing with the Director, City Hall, Oakland, California 94612, within the sixty (60) day period, the determination becomes final at the expiration of the period.

(Prior code 5-27.12)

If a petition for redetermination is filed within the sixty (60) day period, the Director shall reconsider the determination and, if the person has so requested in his petition, shall grant the person an oral hearing, and shall give him ten days' notice of the time and place of hearing. The Director 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.

(Prior code § 5.27.13).

The Director 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 at or before the hearing.

(Prior code § 5-27.14)

The order or decision of the Director upon a petition for redetermination becomes final thirty (30) days after service of notice thereof upon the petitioner or at the time of hearing of redetermination. There is no appeal of the Director's decision (or his/her deputies designated for a redetermination) to the City Council; writs

challenging the Director's decision conveyed by his/her deputies at an administrative hearing must be filed with the appropriate court within ninety (90) days of the final date of such redetermination. (California Code of Civil Procedure § 1094.6.)

(Ord. 12264 § 33, 2000: prior code § 5-27.15)

The amount of any tax, penalty, and interest imposed under the provisions of this Chapter shall be deemed a debit 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 name of the city for the recovery of such amount.

(Prior code § 5-27.16)

Whenever the amount of any tax, penalty or interest has been overpaid, or paid more than once, or has been erroneously collected or received by the city under this Chapter, it may be refunded as hereinafter provided in this Section, provided a written claim therefore stating under penalty of perjury the specific grounds under which the claim is founded is filed with the Director within three years of the date of payment. The claims shall be on forms furnished by the Director. The Director may make such refund if he or she is satisfied that the claimant is entitled to the refund under the provisions of this Section. No refund shall be paid under the provisions of this Section unless the claimant establishes his or her right thereto by written records showing entitlement thereto.

(Prior code § 5-27.17)

The amount of tax, penalty and interest imposed under the provisions of this Chapter is assessed against the property upon the transfer of which the tax 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.

(Prior code § 5-27.19)

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 on such notice.

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 five 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.

(Prior code § 5-27.20)

With the confirmation of the report by the City Council, 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 Assessor for inclusion in the next property tax assessment.

The Director of Finance shall turn over to the County Assessor 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 (12) 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 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.

(Prior code § 5-27.21)

system expenses.

Up to one-third (⅓) of the tax imposed by this Chapter shall be reduced, on a dollar for dollar basis, for all expenses incurred by low and moderate income homebuyers on or after July 1, 2018 to "seismically retrofit" or "install a solar energy system," or any combination of the two (2), for any structure which is used exclusively for residential purposes and the transfer of which is triggering the tax, subject to the following:

A.

For purposes of this Section, "low and moderate income homebuyers" are defined as buyers who meet the requirements of Section 4.20.080 A., B., and D.

B.

The term "seismically retrofit" in this Chapter means any of the following:

Strengthening in compliance with Appendix Chapter A3 of the latest edition of the California Existing Building Code;

Bracing, anchoring, and/or strapping of water heater tanks in compliance with the California Plumbing Code or with standards adopted or approved by the Building Official;

Removal and/or replacement of masonry chimneys in accordance with FEMA P-1024-RA1 or substantially similar standards adopted or approved by the Building Official;

Strengthening or risk reduction in unreinforced masonry bearing wall buildings in substantial compliance with Oakland Municipal Code Chapter 15.28, for buildings not already required to comply with that Chapter;

Strengthening, stiffening, or other damage reduction measures deemed by the Building Official to comply with the intent of reduced seismic forces as defined by the California Existing Building Code.

C.

The term "install a solar energy system" in this Chapter means the installation of an "active solar energy system," as defined by California Revenue and Taxation Code Section 73(b).

D.

From the date of the recordation of the transfer document, the applicant shall have one (1) year to complete all seismic retrofit and solar energy system work, if not already completed prior to the transfer of the property, and submit a seismic retrofit verification application, solar energy system verification application, or both to the Building Inspections Division of the City of Oakland. Upon completion of such work and certification by the Building Bureau as to the amount of the expenses of such work, the City Administrator or his/her designee shall refund such expenses not to exceed one-third (⅓) of the tax imposed on and paid by the buyer.

E.

The people of Oakland authorize that the City Council may establish rules that are necessary and desirable for implementation of Section 4.20.220 and may amend any aspect of this Section as long as such amendment does not result in an increase in the authorized tax rate.

(Res. No. 87320, § 2, 7-24-2018)