Selling a home in San Rafael could get significantly more expensive if voters approve a fivefold property transfer tax increase on the Nov. 3 ballot.

The City Council voted 4-0 on Monday, July 20, to place the measure before voters. It would raise the city's real property transfer tax from $2 per $1,000 of transaction value (0.2%) to $10 per $1,000 (1%). On a $1.5 million home sale, the tax paid at closing would jump from $3,000 to $15,000. Councilmember Maika Llorens Gulati was absent.

The increase would generate an estimated $6 million in new annual revenue, bringing total transfer tax collections to roughly $7.5 million a year. As a general-purpose tax, it needs only a simple majority to pass, and revenue would flow into the city's general fund.

Where the money would go

City officials outlined a spending plan for the new revenue, as reported by the Marin Independent Journal:

  • $2 million for road maintenance
  • $1 million for parks
  • $1 million for buildings and facilities
  • $800,000 for the SAFE (Specialized Assistance for Everyone) crisis response team
  • $600,000 for fire services
  • $500,000 for community service officers

The SAFE team, which responds to nonviolent behavioral health and quality-of-life calls, has been funded primarily through grants and has enough money only through June of the current fiscal year.

Budget pressure behind the push

Interim City Manager Paul Navazio told the council that San Rafael faces a projected deficit of about $1.1 million in fiscal year 2027-28, growing to $2 million to $3 million in the two years after that. To balance this year's budget, officials already planned $4.1 million in one-time expenditures and $1.75 million in cuts.

Navazio said the city is $2.5 million to $3 million a year short of maintaining its street pavement at current conditions. San Rafael retains just 12.2% of property tax revenue paid by its property owners, below the Marin County average of 16.2%.

Because San Rafael is the only charter city in Marin County, it is the only city in the county that can levy a property transfer tax. Raising the rate to 1% would place it in the mid-range among Marin cities, Navazio said.

Real estate community pushes back

At the July 20 hearing, real estate agents and residents argued the tax would land squarely on sellers and raise housing costs.

"I can promise you that the sellers will bear these transfer tax costs 99% of the time," real estate agent Phoebe Reyes told the council.

Jen Pfeifer, a Marin real estate agent with a $3.3 million listing closing July 25, told the council the proposed rate would have raised her client's transfer tax bill from about $6,600 to $33,000. Sandra Delregno, a Rafael Meadows resident, said the increase would drive up the cost of housing. Grace Geraghty, former executive director of Responsible Growth in Marin, urged the city to explore sharing services with neighboring cities instead of raising taxes.

Resident Victoria DeWitt cited UCLA Lewis Center research warning that high transfer taxes can reduce housing turnover, push prices higher, and slow commercial revitalization.

What's next

Mayor Kate Colin and Councilmember Bushey were authorized by the council to file the official ballot argument in favor of the measure. A June survey showed initial support at about 50%, rising to 56% after respondents heard arguments for and against.

San Rafael voters will decide on Tuesday, Nov. 3.