March 2, 2026
Honorable Mayor Kate Colin and City Council members
City of San Rafael
1400 Fifth Ave
San Rafael, CA 94901 via email: [email protected] RE: Agenda item #3.c. Mid-Year Updates to Strategic Plan I would discourage the city council from increasing the Documentary Transfer Tax (aka Property Transfer Tax) on it’s residents as a way to increase City Revenue. This is a TAX without any direct benefit to residents for it’s payment and is based on a percentage of the Selling Price of the Property.
As property values increase so does the amount of the tax that the City receives upon sale of the property. Instead, I suggest the City invest in the City’s infrastructure (i.e. streets) and economic improvements as a way to increase property values and as a result, increase revenue received from the Property Transfer Tax.
San Rafael is the only city in Marin County that has adopted their own transfer tax of $2.00/$1,000, so all other cities in Marin County share the $1.10/$1,000 collected by the County of Marin for property transfer tax. As a result, San Rafael residents pay the full county transfer tax ($1.10/$1,000) in addition to the City's transfer tax of $2.00/$1,000, resulting in San Rafael residents paying a much higher rate of tax than any other city in Marin County.
For example, on the sale of a $1.5 million home, San Rafael residents would pay the $1.10(county portion) plus $2.00 (city portion) for a total of $3.10/$1,000 or $4,650 in property transfer taxes as opposed to all other cities in Marin which would be taxed at $1.10/$1,000 or $1,650. This means residents of the City of San Rafael currently pay the highest rate for property transfer taxes in the county or 182% more than any other resident in Marin County.
I think the suggestion to raise the City's property transfer tax rate to 1 to 1.5% is excessive and would result in even greater inequities between City of San Rafael residents and all other residents in Marin County. Taking a $1.5 million home, if the City raised their property transfer tax to 1.5%, total tax paid by residents would be 1.5% or $15/$1,000 plus the county portion of $1.10/$1,000 or $16.10/$1,000 or $24,150. This results in residents paying over 1,000% more than all other cities in Marin County.
Describing the tax as .2% sounds minor if you're describing sales tax on a loaf of bread but translates into a much larger amount when applied to larger assets, such as real estate.
Comparing the City of San Rafael to the east bay cities of Alameda, Hayward, and San Leandro who are all larger, in population, than San Rafael, with Hayward being almost 3x larger, is faulty and misleading. I think it's important to establish some guidelines for comparison, whether using population, budget or revenue sources or a combination of those things.
In the past, the City of San Rafael has often compared itself to San Luis Obispo who is also a charter city and a county seat but has NOT adopted their own property transfer tax. Another city that is comparable in size (using population) is Petaluma who is a charter city with a similar population and a city property transfer tax identical to San Rafael's ($2.00/$1,000). Petaluma also appears to have a much larger budget. Other comparable sized cities (in population) I looked at that are also charter cities have not adopted a city transfer tax and instead, share in the county transfer tax collected. According to my research, of the 121 charter cities in California, only 26 have adopted their own property transfer tax.
I suggest, if you persist in pursuing this revenue option, that guidelines are established for comparison purposes to other cities, which may require a more in depth look at the population and sources of revenue or total budget for other cities. I would also include the total transfer tax paid by residents (including city and county rates) so as to fully expose the affect an increase in the City portion of this tax would have on residents.
It’s important to see this revenue as increasing as property values increase; decreasing or remaining stagnant only for a city in decline. I would also note that the City and County of San Francisco has recently considered lowering their Property Transfer Tax rate.
Finally, before incurring the costs of a ballot measure, I suggest you carefully consider whether San Rafael residents would vote to increase a tax on themselves which is currently182% higher than any other city in Marin.
Thank you for your consideration of my comments.
Victoria DeWitt