AB 736 California Assembly · 2025-2026 Regular Session

Transfer taxes: limitation.

Summary

Existing law, the Documentary Transfer Tax Act, authorizes the imposition of a tax by a county or city and county, as provided, with respect to specified instruments that transfer specified interests in real property. This bill would, beginning January 1, 2027, prohibit a local jurisdiction, defined to include a city, including a charter city, county, or city and county, from collecting a transfer tax, as defined, levied on the sale or transfer of a real property interest conveyed if the combined transfer tax rate levied by the local jurisdiction exceeds 1.5% of the consideration paid for or value of the real property interest conveyed, except as otherwise provided. The bill would also prohibit a local jurisdiction from levying a transfer tax on the first sale of single-family housing property occurring within 5 years of one or more housing units on the real property being destroyed or made uninhabitable by a natural disaster, as defined. By imposing new duties upon local officials with respect to transfer taxes, this bill would impose a state-mandated local program. The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Bill status passed 3 of 5 stages cleared

Introduction

Feb 2025

Committee Review

Jun 2026

Assembly Passage

Jun 2025

Senate Passage

Governor

Introduced Feb 19, 2025 Last action Jun 25, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

04/10/25 - Amended Assembly → 06/22/26 - Amended Senate · 10 edits · Jun 22, 2026

MAJOR

The Senate amendment adds an entirely new component to AB 736: a state-level cap on local real property transfer taxes effective January 1, 2027, limiting combined rates to 1.5 percent with specific exceptions for high-value single-family homes and disaster-affected properties. The bond funding allocations were also revised to bring the total into compliance with the $10 billion authorization by removing the $200 million Energy Efficiency Weatherization allocation, reducing Multifamily Housing by $250 million, reducing supportive housing by $50 million, and increasing Farmworker Housing by $100 million.

Scope change

The bill's scope expanded significantly from a standalone $10 billion affordable housing bond measure to a dual-purpose bill that also imposes a statewide cap on local real property transfer taxes. The transfer tax provisions apply to all cities including charter cities, as the Legislature found the issue to be a matter of statewide concern rather than a municipal affair.

SCOPE

New Section 11911.5 added to the Revenue and Taxation Code prohibiting local jurisdictions from collecting combined transfer taxes exceeding 1.5 percent of the consideration paid for or value of real property conveyed, effective January 1, 2027.

The bill is now classified as a state-mandated local program (changed from 'no' to 'yes' in the digest) due to the new duties imposed on local officials regarding transfer taxes.

ELIGIBILITY

Exception: single-family housing with a sale price or value of $5,400,000 or higher is exempt from the 1.5 percent cap, with the threshold adjusted annually for inflation starting June 30, 2028 using the California Consumer Price Index.

Exception: no transfer tax may be levied on the first sale of single-family housing within five years of one or more housing units being destroyed or made uninhabitable by a natural disaster (defined as an event subject to a gubernatorial state of emergency proclamation or presidential major disaster declaration on or after January 1, 2025).

REQUIREMENT

Grandfathering provision: for general taxes in effect as of June 30, 2026, the combined rate cap is the lesser of the existing rate or 3 percent, rather than 1.5 percent.

FISCAL

Multifamily Housing Program allocation reduced from $5,250,000,000 to $5,000,000,000 (a $250 million decrease).

Supportive housing allocation reduced from $1,750,000,000 to $1,700,000,000 (a $50 million decrease).

The $200,000,000 allocation to the Energy Efficiency Low-Income Weatherization Program was removed entirely.

Joe Serna, Jr. Farmworker Housing Grant Program allocation increased from $250,000,000 to $350,000,000 (a $100 million increase).

DEFINITION

New definitions added for 'general tax,' 'local jurisdiction' (city, charter city, county, charter county, or city and county), 'natural disaster,' 'single-family housing,' and 'transfer tax.'

Floor votes · Assembly Jun 3, 2025

How they voted

64–11

Passed · 3 other

Total votes 78

Jun 3, 2025

D Democratic59

59 Yea

100% Yea

R Republican19

5 Yea 11 Nay 3

57% Nay

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Jun 25, 2026

Upper · Passed

In committee: Hearing postponed by committee.

upper

Jun 22, 2026

Committee

Re-referred to Com. on L. GOV.

upper

Jun 22, 2026

Committee

Re-referred to Com. on RLS. pursuant to Senate Rule 29.10 (c).

upper

Jun 22, 2026

Upper · Passed

Read third time and amended. Ordered to second reading.

upper

May 14, 2026

Upper · Passed

From committee: Do pass. (Ayes 5. Noes 0.) (May 14).

upper

May 11, 2026

Committee

In committee: Referred to APPR. suspense file.

upper

Apr 22, 2026

Upper · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 8. Noes 1.) (April 21). Re-referred to Com. on APPR.

upper

Apr 15, 2026

Committee

Referred to Com. on HOUSING.

upper

Jun 3, 2025

Assembly · Passed

Assembly Vote: pass (64-11-3)

assembly

Jun 3, 2025

Lower · Passed

Read third time. Urgency clause adopted. Passed. Ordered to the Senate. (Ayes 65. Noes 11. Page 1980.).

lower

May 23, 2025

Lower · Passed

From committee: Do pass. (Ayes 11. Noes 2.) (May 23).

lower

Apr 30, 2025

Committee

In committee: Set, first hearing. Referred to suspense file.

lower

Apr 21, 2025

Committee

Re-referred to Com. on APPR.

lower

Apr 10, 2025

Lower · Passed

Read second time and amended.

lower

Apr 9, 2025

Introduced

From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 1.) (April 9).

lower

Mar 3, 2025

Committee

Referred to Com. on H. & C.D.

lower

Feb 19, 2025

Lower · Passed

From printer. May be heard in committee March 21.

lower

Feb 19, 2025

Introduced

Introduced measure version corrected.

lower

1 primary · 3 co-sponsors