Can a city charge a transfer tax greater than the amount set out in the state tax and revenue code?

0

CIM Urban REIT 211 Main Street (SF) LP vs. City and County of San Francisco

Facts: An owner operates two businesses in a city. Companies are merged under their ownership by the same parent entity. Simultaneously, a majority stake in the ownership of the parent entity changes, triggering both a reassessment of the base value of the property by the county and a transfer tax imposed by the city. The amount of transfer tax exceeds the tax rate permitted under the California tax and tax code. The owner pays the transfer duties and requests a refund.

To claim: The owner says the transfer tax paid was excessive because it exceeds the maximum amount the city is allowed to charge under the state tax code.

Counterclaim : The city claims that it is exempt from complying with state transfer tax and tax base assessment requirements since it acts as a city that allows it to legislate its own municipal affairs.

Holding: A California Court of Appeals has found that the owner is not entitled to a refund of the transfer tax paid on the change of ownership from the parent entity that indirectly owns the property since the city can act on its own business and does not need to comply with the rates set by the state tax and tax code for assessments of the base value of the property. [CIM Urban REIT 211 Main Street (SF) LP v. City and County of San Francisco (2022) 75 CA5th 939]

Read CIM Urban REIT 211 Main Street (SF) LP c. City and County of San Francisco here.

Related Reading:

Legal aspects of real estate

Chapter 1: California Real Estate Law

Share.

Comments are closed.