San Rafael voters in Tuesday’s election seemed to turn down Measure W, a proposed increase in the city’s real estate property transfer tax, a one-time charge paid when real estate changes hands that is separate from annual property taxes.
The measure required a simple majority to pass. As of election night, Measure W had only about 39% support.
The measure would have increased the tax rate from 0.2% to 1%, raising the city’s charge from $2 to $10 for every $1,000 of a property’s sale price. On a $1 million sale, the tax would have increased from $2,000 to $10,000.
The city currently collects about $1.5 million annually in transfer taxes. The proposed increase was projected to generate an additional $6 million a year.
Revenue would go into the city’s general fund, allowing the City Council to allocate it for a range of municipal purposes. Supporters said it would help fund municipal services, such as police, fire and emergency medical services, address homelessness-related calls and repair streets and sidewalks.
City Manager Paul Navazio told the City Council at a July 20 meeting that San Rafael faces an annual shortfall of $2.5 million to $3 million to maintain its pavement system. He said additional funding could help pay for street and infrastructure repairs, two ambulance and paramedic units, and continuation of the city’s SAFE crisis response team, which handles nonviolent calls involving mental health, homelessness and substance use.
Navazio added that the city retains only 12.2% of its property tax revenue, with Marin County receiving 19.2% of San Rafael’s property tax revenue.
Opponents, including real estate agents and the Coalition of Sensible Taxpayers, called the proposal a permanent 400% increase in the tax rate. They argued it could discourage home sales, burden first-time buyers and seniors seeking to downsize, and worsen housing affordability. They also questioned the city’s management of existing tax revenue.
