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Oakland Moving To Exempt Certain Owner-Occupant Landlords From Business Tax

Oakland Moving To Exempt Certain Owner-Occupant Landlords from Business Tax

The Oakland City Council re-introduced an ordinance last night aimed at exempting some small landlords from the city’s business tax on gross receipts from rents. The ordinance, which was introduced in May by council members Kalb, Gallo, and Kaplan, is aimed at relieving low-to-medium income residents of the annual tax of $13.95 per $1,000 of gross revenue, though they will still have to apply for the exemption. Final passage was expected last night, but due to errors in the printing of the title of the ordinance on the agenda, a final vote is now scheduled for the January City Council meeting.

If passed, the exemption will be available to owners of single-family homes, townhouses, or condos who rent out no more than two rooms, as well as owners of a duplex or single-family home with one or two accessory dwelling units (ADUs), so long as they meet the following criteria:

  1. Must currently reside in the home or one of the dwelling units.
  2. Must have received the homeowner property tax exemption on their County property tax assessment
  3. Must have lived there for at least one year prior to the application for exemption
  4. For duplexes, the rental unit must be considered a “covered unit” under OMC 8.22.020
  5. Total household income must be less than or equal to 150% of the Area Median Income (for 2019 this is $117,300 for a one-person household; $134,030 for a two-person household; full table here)
  6. Must not have any ownership interest in any other residential rental property in Oakland

A partial exemption would also be available to owners meeting the above criteria who rent no more than three rooms in their single-family home, townhouse, or condo, exempting them from the tax on two-thirds of their gross receipts from rents.

The ordinance is set to expire on January 1, 2031 unless extended at a later date by the city council.

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