Albany council discusses tiered transfer tax as staff will return with scenarios
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Summary
Council discussed options to change the city's real property transfer tax, including progressive/tiered rates and discounts for certain buyers; staff will model scenarios and return with analysis after council guidance.
The Albany City Council received a staff presentation on Oct. 6 about a potential change to the city's real property transfer tax as a revenue source for core city services and directed staff to return with additional scenario analysis.
A staff presenter summarized how Albany's transfer tax has moved from $11.50 per $1,000 to the current $15 per $1,000 and that the tax generates roughly $2.5 million to $3 million annually but is volatile because it tracks housing-market activity. Staff noted charter cities may set local transfer-tax levels for voter approval and that counties retain the default recording tax rate (typically $0.55 per $500 of value).
Staff also warned the council about a circulated initiative that, if qualified and approved by voters, would remove any local transfer-tax rate above the county baseline and could unwind local transfer taxes across the state.
Councilmembers discussed a range of options. Councilmember Jordan proposed a progressive schedule tied to sales-value breakpoints (quartiles) that would reduce the rate on lower-value sales and increase it on higher-value sales; he suggested rates equivalent to $10, $15, $20 and $25 per $1,000 by quartile as a discussion starting point. Other councilmembers urged moving boundaries that track market changes and asked staff to model impacts on revenue, equity, and incentives for adding housing (for example, ADUs or lot splits).
Councilmembers also suggested exploring limited discounts for first-time or low- and moderate-income buyers, and asked staff to study whether an ADU-related discount or per-dwelling approach would be administrable. Staff cautioned that implementation complexity, legal issues and escrow timing could make certain rebate or discount mechanisms difficult.
Council direction: staff should run multiple scenarios (tiered schedules, progressive rates, possible discounts, and market-escalator options), analyze revenue and distributional effects, and return with findings for council review. No ballot measure was placed on the agenda; council requested additional analysis before deciding whether to pursue a measure for the 2026 ballot.
