California’s SB 2 fee is a $75 charge added to most real estate documents recorded with a county recorder, capped at $225 per transaction and used to fund affordable housing and local planning. Created by Senate Bill 2, the Building Homes and Jobs Act of 2017, it took effect on January 1, 2018, and is codified at Government Code Section 27388.1.1California Legislative Information. California Government Code 27388.1 Because home sales are exempt, the fee mostly shows up on refinances and other non-sale recordings.
How Much the Fee Is and How It’s Charged
County recorders collect $75 on every recordable real estate document that doesn’t qualify for an exemption, on top of the standard recording charges already in place. The statute charges the fee “per each single transaction per parcel of real property,” so a transaction covering several parcels can be billed more than once. The total for any single transaction is capped at $225 no matter how many documents or parcels are involved.1California Legislative Information. California Government Code 27388.1
The person or entity submitting the document pays at the time of recording. In a refinance, the borrower typically picks up the cost through closing charges. When a lender records a lien or a notice of default, the lender pays the fee.
Who Actually Pays It
The fee applies to deeds of trust, reconveyances, lien notices, easements, and virtually any other recordable real estate document that doesn’t fall within an exemption. In practice, that means it lands most heavily on:
- Refinance transactions
- New lien recordings and notices of default
- Commercial recordings that don’t involve a change in ownership
- Easements and similar non-sale filings
If you’re refinancing a mortgage, expect to see the $75 charge on your closing statement.
Which Documents Are Exempt
The largest exemption covers home sales. Any document recorded as part of a transfer that triggers a documentary transfer tax is exempt from the SB 2 fee, along with documents recorded at the same time and “in connection with” that transfer.1California Legislative Information. California Government Code 27388.1 Since traditional home sales almost always involve a documentary transfer tax, the fee doesn’t apply to most purchases.
Section 27388.1(a)(2) lists several additional exemptions:
- Documents recorded for the transfer of a residential home to an owner-occupier who will live in it as a primary residence.
- Documents executed or recorded by the federal government under the Uniform Federal Lien Registration Act.
- Documents executed or recorded by the state, a county, a city, or another political subdivision of California.
- Documents recorded to remove a discriminatory restrictive covenant that violates fair housing law.
Claiming an Exemption
Exemptions are not applied automatically. The document itself, or a cover sheet submitted with it, has to include the word “EXEMPT” along with the specific reason. If a document arrives at the recorder’s office without a valid exemption declaration, the $75 will be collected, and there’s no refund process for exemptions that should have been claimed at the counter. Getting the declaration right at the time of recording is what matters.
Where the Money Goes
Every dollar collected under SB 2 flows into the Building Homes and Jobs Trust Fund, a dedicated account in the State Treasury. Since 2019, the money has been divided under a permanent allocation:
- 70 percent goes to local governments through the Permanent Local Housing Allocation (PLHA) program. Most of that flows by formula to metropolitan cities and urban counties, with a smaller portion available to other jurisdictions through competitive grants.2California Department of Housing and Community Development. Permanent Local Housing Allocation Program
- 30 percent funds state-level programs run by the California Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA). Within that share, 5 percent supports state incentive loans and grants, 10 percent goes to farmworker housing, and 15 percent goes to CalHFA to finance mixed-income rental housing for low- and moderate-income households.
The statute also directs that 20 percent of all money in the fund be spent on affordable owner-occupied workforce housing, a requirement that operates across the distribution channels above.3California Legislative Information. California Health and Safety Code 50470
Local governments receiving PLHA money can spend it on building or preserving affordable rental housing, workforce housing including accessory dwelling units, homelessness programs such as rapid rehousing and shelters, down payment assistance, contributions to local housing trust funds, accessibility upgrades for lower-income homeowners, and the rehabilitation of vacant or foreclosed properties.2California Department of Housing and Community Development. Permanent Local Housing Allocation Program Every expenditure has to fit within that list.