Why the Defeat of AB 736 Matters to South Bay Property Owners
In a resounding win for property rights and housing affordability, a powerful coalition of California REALTORS®, independent housing providers, and property owners has successfully halted Assembly Bill 736. The proposed legislation, which sought to incentivize cities to increase documentary transfer taxes on real estate—specifically targeting higher-value properties—will not move forward. For the South Bay market, where premium home values are the norm rather than the exception, this swift defense protects both housing providers and the local economy.
Rapid Advocacy Blocks AB 736
When AB 736 emerged as a sudden threat, the real estate community mobilized instantly. In just over 24 hours, more than 12,000 phone calls were made to state legislators opposing the bill. This massive response delivered an unmistakable message to Sacramento: raising transaction costs is not a viable solution to municipal budget challenges.
This victory would not have been possible without the immediate action of the broader real estate ecosystem. We extend our deepest gratitude to the Southern California property owners and rental property owners who answered the call, engaged with our outreach, and contacted their elected officials. By standing shoulder to shoulder with REALTORS®, these independent housing providers and investors ensured that the voices of those who hold a financial stake in our communities were loud, clear, and impossible for lawmakers to ignore.
In South Bay communities like Manhattan Beach, Hermosa Beach, and Palos Verdes, a transfer tax hike would have severely penalized property owners. Because local market values routinely sit well above statewide averages, a progressive “mansion tax” structure would have unfairly burdened mom-and-pop landlords and long-term owners looking to liquidate or exchange assets. By killing the bill, this joint advocacy kept millions of dollars in transaction equity where it belongs—with the owners.
Preserving the Two-Thirds Voting Threshold
Simultaneously, a critical broader agreement on California tax policy has been reached. The California Association of REALTORS® (C.A.R.) supported a compromise where the Howard Jarvis Taxpayers Association agreed to withdraw its Local Taxpayer Protection Act (LTPA) initiative. In exchange, lawmakers will place a constitutional amendment before voters to firmly preserve the requirement that local special tax increases receive two-thirds supermajority voter approval.
Crucially, this agreement ensures that ACA 13—a measure C.A.R. opposed and was prepared to fight—will be removed from the November 2026 ballot. While the new constitutional amendment will apply prospectively, it permanently shields real estate investors and housing providers by restoring the robust two-thirds threshold for all future local special tax measures.
A Unified Win for Southern California Real Estate
This dual victory underscores the undeniable power of collective advocacy. When REALTORS®, property owners, and rental housing providers unite, Sacramento listens. For the South Bay market, this prevents artificial barriers to transactions and preserves hard-earned equity. C.A.R. will continue to monitor AB 736 to ensure it remains dead, securing a more stable, predictable, and fair market for California taxpayers. Thank you for standing up for your property rights.
Source: California Association of REALTORS®. (C.A.R.). June 25, 2026. REALTORS® Deliver Major Victory: AB 736 Stopped. https://www.car.org/aboutus/mediacenter/news/ab736