What Santa Cruz’s New Measure C Means for Homeowners, Buyers, and Sellers
Santa Cruz voters recently approved Measure C, officially called the Workforce Housing Affordability Act of 2025. Starting July 1, 2026, this measure introduces new property-related taxes within the City of Santa Cruz that could impact homeowners, buyers, sellers, and real estate investors. As local a local REALTOR®, I believe it’s important for consumers to understand how these changes may affect ownership costs and real estate transactions moving forward.
What Measure C Does
Measure C creates two new taxes:
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A $96 annual parcel tax on most properties located within Santa Cruz city limits
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A new graduated transfer tax on property sales above $1.8 million
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Funding is scheduled to continue for 20 years, with revenue earmarked primarily for affordable housing and homelessness-related programs
According to the City, these funds are legally restricted to housing-related uses and will be subject to oversight and auditing.
When This Starts
Measure C takes effect July 1, 2026.
That means:
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Property owners will begin seeing the new annual parcel tax on property tax bills for the 2026–2027 fiscal year
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Real estate transactions closing on or after July 1, 2026 that meet the threshold may be subject to the new transfer tax
Who Will Feel the Biggest Impact?
The transfer tax applies only to property sales over $1.8 million, which means the biggest effects may be felt in:
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Coastal neighborhoods
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Luxury home sales
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Multifamily and investment properties
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Certain commercial transactions
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Higher-value residential properties within city limits
Because this tax is added on top of existing transfer taxes and closing costs, it could meaningfully affect how buyers and sellers structure negotiations.
What This Could Mean for Sellers
If you’re planning to sell a qualifying property:
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Your net proceeds could be lower due to the added transfer tax
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Buyers may become more price-sensitive near tax thresholds
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Pricing strategy may need to adapt depending on market conditions
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Timing may matter if you’re considering selling before implementation
For some sellers, this becomes another cost that needs to be accounted for early—not discovered during escrow.
What This Could Mean for Buyers
Even when sellers technically pay transfer taxes, transaction costs often influence negotiations.
That could mean:
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More aggressive price negotiations
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Changes in buyer demand at certain price points
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Strategic shifts toward properties just below tax thresholds
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Slightly reduced market fluidity in affected segments
What This Means for Property Owners
Even if you’re not selling, most owners within city limits should expect the additional $96 annual parcel tax unless exempt.
Measure C also prohibits residential landlords from directly passing that parcel tax onto tenants.
Possible Exemptions
Certain property owners may qualify for exemptions, including:
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Some low-income homeowners
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Certain seniors
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Affordable housing properties
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Schools
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Religious institutions
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Some tax-exempt organizations
Exemptions are not automatic and require documentation and filing with the City.
Bottom Line
Measure C reflects Santa Cruz voters’ decision to fund housing affordability and homelessness programs through property-related taxes. Whether you support the policy goal or not, the practical reality is that this changes the math for some owners, buyers, and sellers. If you own property in Santa Cruz—or are considering buying or selling—it’s worth understanding how these changes could affect your specific situation before making a move.
