M
ayor Kevin McCarty has floated a proposal to raise Sacramento’s real‑estate transfer tax in order to fund housing assistance for the city’s most vulnerable residents. The plan would increase the tax from 0.275 % to about 1 %—roughly $2.75 to $10 per $1,000 of property value—on the highest‑priced transactions, likely those above $1 million or $2 million. McCarty says the measure could bring in up to $9 million a year, earmarked for down‑payment help for first‑time buyers, rental subsidies, and the creation of tiny‑home communities. He stresses that the change would affect only a small slice of sales, with “99 percent of home sales in Sacramento” remaining unchanged.

    During his State of the City address, the mayor announced that he will bring the proposal to City Council for consideration and, if approved, place it on the 2026 ballot. A simple majority vote would be required for passage. Councilmember Mai Vang welcomed the initiative, saying that the city’s greatness should be measured by how well it serves its most vulnerable communities and that housing decisions must center them.

    Real‑estate appraiser Ryan Lundquist noted that properties selling for more than $1 million represent about 5 % of Sacramento’s market. He also referenced Los Angeles’s 4 % “mansion tax” on homes over $5 million, which has slowed sales at that price point since 2023. McCarty pointed out that many large cities, both in California and nationwide, have transfer taxes well above Sacramento’s current rate, and that adjusting the tax to a moderate level for high‑end sales would help fund local housing solutions.

    The mayor said he is concerned that rising costs are squeezing out people and that the next generation may struggle to stay in Sacramento. He emphasized that the proposal is still in the planning stages and will require council approval before it can appear on the ballot. The city will continue to work with stakeholders and council members over the coming months to refine the proposal’s structure before moving forward.

    The mayor highlighted that the revenue would be directed toward programs that help residents purchase homes, secure stable rental housing, and build tiny‑home communities for those without shelter. He emphasized that the tax hike would target only the highest‑priced transactions, leaving the majority of home sales—and the everyday homeowner—unaffected. The city plans to hold public forums and engage with community groups to refine the details before presenting the measure to voters.

    Stakeholders will review how the funds are allocated, ensuring transparency and accountability, and the city will publish annual reports on the program’s impact.