While it may be profitable for large or out-of-town property owners to leave units empty, it is very expensive for the community and for those unable to find housing. Across the United States and in the Bay Area, corporations are buying property that used to belong to families, driving up housing costs and speculation. In Berkeley, there 1,120 units simply not “available to rent”; 480 of them are in properties that are at least half vacant. Vacant units could be rented to people helping with our housing crisis. They also cause blight and costs for city code enforcement health and fire departments.
The tax will not impact units that are vacant due to normal market turnover. The properties that would be subject to the tax have to be vacant for 182 days out of the year. This is outside of the normal market turnover experienced by units.
No. Your primary residence is not impacted.
Single family homes are defined as including an ADU and/or a JADU on the property. If you have a single-family home and an ADU and/or JADU on the same lot, it is classified as a single unit. An individual or family trust can leave their ADU and/or JADU where they live vacant, and still be exempt from the Empty Homes Tax. Homeowners can hold a unit open for a child returning from college and can rest assured that they have a space to house a caregiver as they grow old.
Property owners who live in a duplex, triplex or quadruplex can leave the remaining units vacant; they will be exempt from the tax.
No. Only voters can increase the amount of the tax or add properties subject to the tax.
Property owners are exempt for one year after submitting a building repair, rehabilitation, and/or construction permit. Once the permit is issued, property owners have two years to complete repairs or construction before the tax takes effect. The Building Official can extend this period for good cause and upon a showing of progress made in the work.
The building will be exempt from the tax for two years. Further exemptions will apply if the owner applies for a permit and conducts repairs (see above).
A building that is in probate is exempt from the tax for two years.
They will not be taxed while in a care home. There are no time limitations associated with this.
No. Owners of empty condos, duplexes, and single-family homes that aren’t their primary residence will be charged an annual tax of $3,000 per unit. Vacant units in larger buildings will be charged $6,000 per year. Fees will double for units vacant for two or more years.
The tax goes into effect on January 1, 2024 – over a year from now – giving property owners significant notice, and a unit will only be taxed if it remains vacant for at least 182 days that year. This effectively gives property owners two years following passage of the tax to rent the unit out, request a permit for renovation, or sell the property. If the unit is rented, a permit is out for its renovation, or it is being renovated, then it is exempt from the tax.
The tax exempts all institutions that are exempt from property taxation under federal, California, and local law. This means religious institutions, among others, are not impacted by the Empty Homes Tax. Likewise, 501(c)(3) organizations are exempt from the Empty Homes Tax.
In short, yes. Registration exemptions relate to the underlying owner, not the lessee. If UC Berkeley master leases a building that is required to register, it is still required to register. That said, given UC Berkeley’s huge housing shortage, it is unlikely UC Berkeley will leave units unleased for long periods of time.
The City Finance Department estimates that the tax will raise between $3.9 and $5.9 million per year, depending on the length of time units remain vacant.
The tax will be administered by the City. It is estimated that two full time employees will be required to successfully run the program. Tax administration will be smooth and cost-effective due to the City’s existing dataset and rental regulations, leaving millions of additional dollars to provide essential city services or build affordable housing. The Measure also empowers the City to create an appeals process through regulations – a routine process.