REVENUE AND EXPENDITURE ASSUMPTIONS
DOCUMENT TRANSFER TAX
Description Documentary transfer tax revenue is based on the transfer of real property. When property is sold, the City receives $55 per $100,000 of the property sale value ($550 per $1 million). Documentary transfer tax revenue corresponds directly with the number of real estate transactions that occur in Irvine. Factors affecting property transfers are mortgage interest rates, new development, and turnover in commercial property. Trend Documentary transfer tax revenue is highly correlated with the ebb and flow of local real estate development activity, with revenues that can be significantly volatile from year-to-year. Revenues are particularly influenced by large commercial property transactions. FY 2017-18 actuals were higher than anticipated due to the purchase of the 73-acre Broadcom corporate campus. Outlook Residential construction resulted in moderate growth in FY 2017-18 and new home building activity is expected to continue through 2019. As activity is expected to remain relatively the same, Documentary Transfer Tax revenue is projected to be consistent with FY 2018-19 projections. As the real estate market has improved over the last few years, the number of annual transfers as well as the number of very high value transfers picked up from recessionary levels. Revenues during the last several years have been skewed upward by the sale of large properties. Based on this, revenues are expected to remain relatively flat for the five-year outlook.
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FY 2019-21 Proposed Budget
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