As of July 1, 2020, the Measure E transfer tax in San Jose will kick in. Homes sold for more than $2 million will be billed an additional tax, depending on the price point. San Jose already has a city transfer tax, which is $3.30 per thousand, which customarily is split 50/50 between buyer and seller. The new Measure E fee will be on top of that amount.
The current San Jose city property transfer tax costs $3.30 per $1,000 of assessed property value (sale price in nearly all cases).
The Measure E transfer tax increases the rate as of July 1st to:
• $7.50 per $1,000 of transfer value on properties priced between $2 million and $5 million
• $10 per $1,000 of transfer value on properties priced between $5 million and $10 million
• $15 per $1,000 of transfer value on properties priced at $10 million and above.
For example, let’s consider a San Jose house that will be closing escrow in June, at $2,250,000.00. The total city transfer tax today would be $7,425.00, and if split in the ordinary way, each side would be paying $3,712.50.
If that same property closes escrow in July, the Measure E cost would be $16,875.00, or if split, $8,437.50 PLUS the original amounts of $7,425.00 or $3,712.50 if shared. The July total would be $24,175 (or $12,087.50 if divided equally).
Who pays the new Measure E transfer tax?
While the regular San Jose transfer tax is customarily split 50/50, who pays the additional rate is not fixed by law and it could be negotiated.
Where does the Measure E money go?
The funds raised from this tax will go to help the homeless and to provide affordable housing in the city. Read more about the ballot wording and where the money goes here.
What if your purchase price is just over $2 million?
There are ways to get a $2,001,000 or similar borderline home price below the threshold. We see this often enough when there is some reason for a buyer to want to lower the sale price. Since some sale costs are customarily paid for by the seller, one work around is for the buyer to pick up some of those costs and request a lower sale price.
Lastly, it should be noted that in Santa Clara County, only 3 cities have a transfer tax: San Jose, Mountain View, and Palo Alto. Of those, this extra transfer tax is only in San Jose.