When the average person buys a home, or a business buys a commercial property or apartment building, they pay what’s called a real estate transfer tax — and so does whoever is selling the place. But not all transfers of property trigger this tax. When city leaders originally designed Oakland’s real estate transfer tax, they decided for a variety of reasons not to apply it to foreclosures.
A foreclosure is when a lender — usually a bank — takes back someone’s property because that person or company has failed to keep up with their mortgage payments.
Earlier this year, the City Council decided to give voters the option to change the transfer tax so that banks and other lenders foreclosing on a property would also be required to pay it. The homeowner who’s being foreclosed on would not have to pay the tax.
Called Measure FF on the ballot, to pass, it would need a simple majority vote.
Measure FF would amend Oakland’s real estate transfer tax in the following ways, according to an impartial analysis by the city attorney.
The general exemption for foreclosures would be eliminated.
Some foreclosures would still be exempt if they involved transfers to convert commercial property into certain affordable housing or healthcare uses; transfers of property to community banking organizations; and transfers of properties that consist of four residential units or less to a natural person or family trust.
The City Council would also gain the authority to amend and/or remove the remaining foreclosure-related exemptions.
The council could also establish new foreclosure-related exemptions.
The real estate transfer tax is a major source of revenue for Oakland — between $50 and $70 million in recent years. This money goes into Oakland’s general fund, meaning it can be used for things like police, fire, parks, the arts, and more.
The city auditor estimates that Measure FF would raise up to $13.8 million in additional revenue each year, though some years would bring in a lot less. But transfer tax is notoriously volatile; in off-years when the housing market slows down, or during recessions, this source of money for the city can drop off by many millions of dollars. When the economy is booming, transfer tax can provide a windfall. Changing it to include foreclosures could make the transfer tax more stable; those off-years are when more foreclosures tend to happen.
No groups have emerged to oppose Measure FF. We’ll update this post is that changes.
The official argument in favor of Measure FF, signed by District 2 Councilmember Charlene Wang; Mayor Barbara Lee; Mike Petohouff, a real estate professional who serves on the Budget Advisory Commission; and others, describes the current rule exempting foreclosing institutions from paying the transfer tax as a loophole that benefits hedge funds and other big investors.
“In just the first half of 2026, this loophole has cost Oakland up to $25 million,” they wrote. “That’s less for paving roads, responding faster to 911 calls, and stopping illegal dumping.
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