California Imposes New Real Estate Instrument Recording Fee, Excludes Documents Related to Residential Dwellings

Starting January 1, 2018, the state of California will impose a $75 per transaction fee (not to exceed $225) for the recording of “every real estate instrument, paper, or notice required or permitted by law to be recorded.”  This fee—originated by the Building Homes and Jobs Act—applies to documents “relating to real property,” but does not apply to residential purchase transactions.

The revenues from the fee will be deposited into the newly-minted Building Homes and Jobs Fund at the State Treasury.  The state intends to make those funds available to state and local departments and agencies which assist homeless citizens and establish affordable housing in California.

The fee, however, will not be imposed on any “real estate instrument, paper, or notice recorded”:

• In connection with a transfer subject to the imposition of a documentary transfer tax as defined in Section 11911 of the California Revenue and Taxation Code; or
• In connection with a transfer of real property that is a residential dwelling to an owner-occupier.

The residential property purchase exemption was included in the bill in an effort to “promote housing and homeownership opportunities,” and prevent the “increase [of] transaction costs associated with these transfers.”

The Building Homes and Jobs Act is accessible here.