Sacramento Mayor Proposes Real Estate Tax Hike for Housing Funding

Sacramento Mayor Kevin McCarty has proposed increasing the city's real estate transfer tax on high-value home sales, likely those over $1 million, to fund housing initiatives such as tiny home communities, downpayment assistance for first-time buyers, and additional shelter beds. The current tax generates over $12 million annually, but McCarty estimates the proposed hike could raise an additional $8 to 9 million each year, with the measure planned for the 2026 ballot pending City Council approval. While the tax increase targets only about 5% of home sales, potentially sparing most middle-class homeowners, it reflects ongoing challenges as California has spent over $37 billion on homelessness without clear effectiveness. Advocates acknowledge the need for more urgency and support to address the public health crisis posed by homelessness in Sacramento. The proposal contrasts with tax relief measures elsewhere, such as those proposed in Florida and Texas, highlighting different state approaches to property taxation and housing funding. McCarty emphasizes the importance of supporting vulnerable communities and ensuring Sacramento's growth accommodates their needs.