In October 2020, the Juneau Assembly voted to require mandatory disclosure of property sales prices. This ordinance requires buyers of property in the City and Borough of Juneau to disclose under signed oath to the city assessor their full purchase price. Currently, Juneau is the only city in Alaska that mandates full disclosure of real estate transactions.
Subsequently, the CBJ Assembly amended this disclosure, adding a penalty of $50 per day for failure to comply. Falsifying information on the form is a Class A misdemeanor. The CBJ’s justification for the ordinance was to more accurately determine assessed values on which property taxes are based.
The Assembly action was controversial but, with limited discussion and testimony, it passed on a vote of 6-3 with Assembly members Greg Smith,Wade Bryson, and Mayor Beth Weldon voting against it
Since then, dissatisfaction with the new rule has mounted. A group, Protect Juneau Homeowners’ Privacy, was formed to educate the public about the ordinance and gather signatures to place mandatory disclosure on the ballot in October’s municipal election.
While there are exceptions to the disclosure rule for transactions between close family members and associated businesses, for example, the rule covers virtually all real estate transactions in the borough, both commercial and residential. In addition to the buyer and seller’s name and sales price, the city disclosure form requires the buyer to list terms of the sale (including financing methods), the value of any personal property, the value of any included business, whether the property was publicly listed and any other information affecting the value of the property.
The information disclosure requirement is extensive and proponents of placing the rule on the ballot assert that it is so far-reaching and invasive that the public should be given the opportunity to either support or reverse the Assembly’s action.
There are many variables that factor into property sale prices. For residential sales, the condition and age of the home, special land features, closing cost allocations, needed repairs and upgrades, and current interest rates can affect the sales price dramatically. Commercial property is even more complex where sophisticated sales terms, location, and prevailing rental rates play an even larger role in establishing value.
In other words, the sales prices in many transactions are difficult to compare based on square footage and other visible and quantitative factors alone and will likely be subject to the same variability affecting previous CBJ assessment methods.
Has the Assembly carefully considered alternatives or the lack of precision inherent in relying heavily on sale prices or weighed that against the privacy concerns raised by the new disclosure rule? Some states have chosen to maintain privacy on residential sales by developing algorithms based on mortgage amounts or other reported data to arrive at pricing information.
There is also a great deal of unease among some Juneau property owners who have seen what often transpires in other states when real estate disclosure is mandated.
Armed with such information, taxing authorities, like the CBJ, have eyed those transactions as a potential source of additional revenue. In some states, governmental units levy “transfer taxes” or similar fees any time properties change hands. These fees can amount to thousands of dollars depending on the value of the property. This is another way for municipal governments to tax property owners in excess of the taxes they already pay.
While the CBJ Assembly has not yet contemplated such a tax, gathering private information on real estate sales is one step toward doing so. Considering the prevailing penchant of the CBJ to over-collect property taxes and deficit-spend, this should give taxpayers pause.
Juneau voters who are interested in supporting this effort can sign a petition at most Juneau realty offices or get more information by visiting either of the Protect Juneau Homeowners’ Privacy websites: ProtectJuneauHomes.com or facebook.com/protectJuneauhomeowners. Petition signatures will be gathered through Friday, June 3.
Regardless of your opinion on CBJ tax policy, and especially in light of the strong and fundamental right to privacy explicitly recognized in the Alaska Constitution, voters should have the opportunity to decide on an issue as significant as whether private real estate information should be disclosed