How Proposed Transfer Tax Increases Could Harm Raleigh Home Sellers… and Buyers
September 12th, 2007 Categories: Buying a Home, Selling a Home
What is the likely impact of a 200% tax increase on individuals selling a home in Raleigh? Do you want to pay additional taxes when you sell your home? Will the public benefit, or be harmed by such legislation?
In case this is news to anyone, let it be known that your North Carolina state legislators have seen fit to attach an increase in the property transfer tax to a Medicaid relief package that was recently approved by the House and Senate and supported by Governor Easley. A transfer tax tied to a Medicaid relief package? Give me a break! Is there anyone else who wonders what the heck one of these has to do with the other?!?!
The current transfer tax, that item on your closing statement called “revenue stamps”, is .2 percent of the sale price. A $200,000 home currently has a transfer tax of $400, which is paid by the seller. The proposed increase would raise this tax to .6 percent. Under the proposed tax increase the same $200,000 home would now cost sellers $1,200.
How will this impact someone selling a home in Raleigh? My guess is home owners will seek relief in the form of a higher asking price for their properties. Some may even choose to postpone listing their home for sale. Let’s see… in a supply and demand model lower supply with constant demand results in higher prices, right? How much more will buyers have to pay? Does anyone think this result is a good idea? Apparently the state legislature does. What do you think?
Raleigh has benefited from a very normal real estate market and avoided the excessive increases in value that are now wreaking havoc on major markets across the country. Will this increased transfer tax single handedly cause home values in Raleigh to increase out of control? Probably not, but why throw another log on the fire? Just the fact that our market is doing so good right now and attracting so many people who want to relocate to Raleigh is pressure enough on home prices. People we simply do not need this tax!
The NC Association of Realtors (NCAR) and the NC Home Builders Association have been lobbying against any kind of transfer tax increase. I am a member of NCAR and personally oppose this tax. So do the vast majority of my 44,000 fellow NCAR members. We have written our state law makers and worked hard, but they ignored our pleas and did the sneaky deed of including the transfer tax increase language in the previously mentioned Medicaid bill.
There is still time for you to make a difference. You can stop this really bad idea from becoming a reality that every one of you will have to deal with every time you buy and sell a home in the Raleigh area.
The language that was approved by your beloved state lawmakers gives each county the option to add a referendum on ballets this fall allowing voters to choose to implement the increase, or not. We need your help. Although it seems unlikely that voters would approve such a measure, who knows how this will actually be presented on ballots. I’ll be sure to keep all of my readers informed as the time approaches. Personally, I (and home sellers and buyers across the state) would appreciate your help in defeating this tax increase.
If you would like to read more about this important issue, go to www.itsabadidea.org. If you feel strongly either way about this, be sure to leave your comments below. In any case, be sure to vote this fall. It’s the only shot you will have at making a difference!
Wow…this is as controversial as the Florida Property Tax issue…great topic!
[...] In North Carolina, some crafty legislators included a “transfer” tax for every home sale, in a Medicaid bill…How did THAT happen? Talk about more “hurt” to the homeowner! In Florida, tax reform is not a “partisan” issue….It is not Democrats vs. Republicans, as many would like to think. [...]
[...] Â The government ‘mafia’ is after your money too. [...]
[...] How Proposed Transfer Tax Increases Could Harm Raleigh Home Sellers… and Buyers [...]