Anti "Flip" Law is Bad News for Homebuyers and Homeowners
The California Association of REALTORS (C.A.R.) is opposing a bill that will zap homebuyers if they have to sell within seven years.
According to C.A.R., AB 1771 (Ward) will impose a 25% tax on a home if it is sold within three years after it was purchased. After three years, the tax rate decreases annually. Seven years after purchase, the homeowner would not be subject to the tax.
C.A.R. says this legislation is problematic in many ways including penalizing homebuyers who may have to sell soon after a purchase due to unforeseen circumstances. While it may be intended to limit so-called "flipping," C.A.R. says it will drive up home prices as a result of fewer choices being available for buyers.