Transfer Tax For Good Growth


When my wife wants to fall asleep she asks me to explain how a telephone works. Explaining growth and infrastructure has the same effect. Mention taxes and the average person will wake up but upon hearing the trigger phrase "tax base", eyes will glaze over and deep sleep sets in. Call me a somnambulist chaser if you will but I'm trying to raise awareness of the need for local government funding options.

That's why I've created this video: Support Transfer Tax or watch below the fold:

It's no secret that North Carolina's population is growing rapidly. With that growth comes a need for additional services and bricks, mortar, asphalt, steel and concrete to deliver those services.

The costs of growth are predominantly the costs of building schools and infrastructure. As everyone in the real estate industry knows (other than Realtors apparently), construction inflation in recent years has far outpaced consumer inflation, (Consumer Price Index). With high construction costs, rapid growth and, mushrooming Medicaid costs, many local governments can only turn to property taxes for additional revenue.

There is an alternative to property tax that 7 NC Counties already have: a Land Transfer Tax option that 6 of those counties exercise. But that authority needs to be delegated by the NC General Assembly to each of those remaining 93 counties

It is time for all NC Counties to have the revenue options that some counties enjoy. It's time to support the Transfer Tax option to provide fair funding for good growth and to ease the property tax burden for seniors and others on fixed or low incomes.

For more information on Transfer Taxes go here:
  Transfer Tax Q&A
  Transfer Tax: NC Experience
  1% Discussion Points

 
 

Comments

It's Not Rocket Science

The money has to come from somewhere -

think about it, if you tax the average North Carolinian out of his home ...

and he has to move to a cheaper state ...

You'll be stuck with all those Damn Yankees.

Down with the Realtor lobby

They don't want anything to possibly threaten or slow down their 6% commission gravy train.

6% split four(2 agents, 2 agencies)

and sometimes more ways is not a gravy train. They work on commission. They typically earn every penny......and then some. As a business owner you should know this.

You want me to start attacking your profit margin? Hmmmm? I mean, it's your employees who are doing all the work, right? (You know, I'm kidding, but I am trying to make a point.....don't know if it's working.)

I don't agree with the Realtor's Association, but I do NOT begrudge hardworking real estate agents/brokers their commissions.



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Vote Democratic! The ass you save may be your own.

Which is why I targeted the

Which is why I targeted the associations and didn't say "down with Realtors." Frankly, I think the Associations of Realtors are full of crap with their disingenuous cries for the poor and affordable housing. At minimum, they are afraid a new fee/tax will slow down home sales some. I don't think that will happen because of a 1% tax, but considering our crisis with schools and other capital projects, that might not be a bad thing.

We're an unofficial "nonprofit" almost a "charity." I have no need to defend a profit margin or my meager salary. :-)

Great post, Greg

I support finding new, sources of funding for local governments. I still don't feel great about the transfer tax because of the impact on low income home buyers, but I'm not necessarily opposed to it.



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Vote Democratic! The ass you save may be your own.

there is a limit

to how small a house can be bought.

According to figures within the Edwards book, the average house bought nowadays has 6.1 rooms. That includes kitchen, bathrooms etc. That is an average, across the entire country. I cant imagine you being able to buy a house with less than 4 rooms.

I can see there being some impact on low income earners, but I think reworking our loan industry would offset any negative consequences one hundred times over.

Draft Brad Miller-- NC Sen ActBlue

"Keep the Faith"

It's the sellers who have the problem.

In my area....Fayetteville...we have a lot of young buyers who are in the military. They usually buy on a VA loan with no down payment. VA charges a funding fee of 2% (different amounts if you are a disabled veteran or are buying your second or third home). The funding fee is financed too. From the very beginning they owe 102%. If they get transferred before three years or so, well, you do the math. Yes, I am a REALTOR and I am a member of the local, state and national Association of REALTORS. I do not agree with everything they do, but I'm beginning to resent being considered one of "you people".

Lovex7

I would be interested in your take on the land transfer tax.

Do you think that this tax is an equitable way to support infrastructure? And do you think that it will be a barrier to anyone purchasing homes? (And I don't consider you one of "you people"!) I'm a member of several professional associations that don't hold opinions that I agree with either. What is your personal opinion - if you feel comfortable sharing it in a relatively public place?
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The Den
It's your democracy; use it.

It's amazing what they'll approve you for

When we were looking for our first house, we went to the credit union to get pre approval for a loan. They approved us for some crazy-high amount there was no way we could really afford. I think we financed about half of what they were willing to lend us.

I'm not sure who came up with it, but we enjoy the philosophy of "the best way to know what it feels like to be rich is to live in less house than you can afford."(or something like that) Of course, we just had county revaluation here and I now live in a house I could not afford to buy (if its really worth that).

I don't really see

how a 1% transfer tax threatens The Realtors Association. It seems a tempest in a teapot to me.
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The Den
It's your democracy; use it.

It doesn't threaten REALTORS

as far as I can tell. I'm concerned about the young home buyers who don't have enough equity to sell their homes and pay all the expenses involved. In this area buyers also expect the sellers to pay a large part of their closing expenses. The builders do it, so most sellers have to do it to compete. I have talked many young people out of buying, but others buy anyway. Sellers already pay taxes. They pay for revenue stamps. What is that? A tax. The real estate market was so good for a few years that it wasn't really a problem, but that's not the case now. More houses are going into foreclosure and it is going to get worse. In our area it is that damn war. I was given a letter to sign and send to my representatives, but I didn't sign it or send it. I know the money has to come from somewhere. It is a real problem, and if I knew the answer I would run for office. Maybe against Liddy.

Lovex7

what if we

did that, and then also exempted certain neighborhoods.

My reasoning is that, presumably, schools were built to accept a certain population size. So lets say we did a 1% tax on homes over a specific price built after a certain year?

The big argument against that of course is that the general applicability of this proposed tax is one of its better aspects.

Draft Brad Miller-- NC Sen ActBlue

"Keep the Faith"

Too complicated.

The issue of affordable housing is the main objection Love's making . . . and it's the one I've heard most often. Flatten that and the problem is solved.

It could be a hard number, chosen by the jurisdiction wanting the tax. It could be adjusted annually according to some cost of living index.

So. .

If we exempted (for instance) the first $150,000 of the purchase price of the home, a home selling for $175,000 would only be taxed on $25,000. Is that what you mean? That would cost $250 - much more reasonable for a low-income buyer than $1750.

And the $1,000,000 McMansions would still pay $8500.

I wonder if that could work for the Realtor's Association?
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The Den
It's your democracy; use it.

Commercial Real Estate

would pay the biggest portion of this, right? I wonder if there are stats from the 6 counties to back that up.

The proposed tax would be especially effective because forest and farmland that is being sold & developed for the first time would pay the tax the moment it is sold, and then again after it is divided up and sold as lots.

The state could create an income tax credit to refund the tax to low income homebuyers. This would probably be more effective than exempting low price housing, where sales are often to wealthy individuals or out-of state investors who intend to rent the property. They don't need a break on this.

great point

i cant remember the term for it, but what you are talking about is very prevelant.

Draft Brad Miller-- NC Sen ActBlue

"Keep the Faith"

Good idea.

That would do it too.

I would vote for you.

or perhaps a very close relation.

I know that there are many very "cheap" deals in some parts of Moore County because of the war. Soldiers have been deployed, families have moved, and the houses are just empty.

You probably know the part of the world I'm talking about - just north of Spring Lake.

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The Den
It's your democracy; use it.

I understand what you're saying

In this area buyers also expect the sellers to pay a large part of their closing expenses.

when a realtor tried to fly that by me when my house was for sale, I said, *#&^^%#*.

And kept my house.

That 'wonderful offer' was a kid who needed his mommy for closing costs, 2 roommates to make the payment, and 5 grand from me from closing.

He really could afford to buy, couldn't he?

And it didn't sit too well that the broker's cut was going to be bigger than my own.

The existing home market is flat because new houses are being built by the thousands every week.

And frankly, I don't care about 'young home buyers' because I was once one, too. Things may have changed, but they haven't changed that much. A new McMansion is something to work for not a right that's granted to you.

It comes down to how bad do you want it, what are you willing to sacrifice to get it, and can you pay the piper if things don't work out for you.

Personally, I prefer an impact fee on new construction but nobody asked me.

It's been a long, hard day, Lovex, so please don't take that personally.

I'm all for impact fees



Robin Hayes lied. Nobody died, but thousands of folks lost their jobs.



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Vote Democratic! The ass you save may be your own.

Six counties should offer enough for comparison.

Look at counties without the transfer tax that are "similar" and see how it effects growth and housing. I'm thinking "no significant difference".

One man with courage makes a majority.
- Andrew Jackson

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

I wonder how many people

have turned down a house solely because of transfer tax? I can speculate.

hummmmm

still thinking

counting, using toes and ear tips and everything else.

factoring in the person(s) love this house.

OOOO YEA

And the answer is

ZERO

Nough said,

DO IT!

Aint perquimans county one of the 6? i think we are. We still growing. We just approved a housing complex for 800 houses. No one was opposing a transfer tax in the community.

I'M for a birth tax

I think we ought to tax people who give birth. Children cost the state a lot of money and a direct tax on children would raise a lot of revenue. The tax on children would pay for the schools that are used by these expensive burdens on society. Now really I like broad based taxes not just taxes on one segment of society

As Odd as it Sounds -

I could go for that.

But if you think it through further - abortion would have to stay legal - and cheap.

That's what they do in China, isn't it?

I heard on NPR today that families who have more than one child in China can be taxed more than (the equivalent of) $9000. That's several years worth of income to the poorer families. It means that the rich can afford to reproduce; the poor can't. If you think about the ramifications of that if it were enacted here, it might amount to institutionalized racism - because there is greater poverty in racial minorities than there is in the white majority. (Not saying there aren't poor white people - not saying that at all. I'm talking statistically.)

A tax on children - facetious though the suggestion may have been - would go over well in parts of my county. The retirees who seem to believe they are the majority here oppose paying for schools (because they've already raised their children, don't you know). They fail to realize that, as they approach their doddering years, the nurses and techs who care for them are the ones who are educated in the schools that they fail to support.

But if you tax children to support infrastructure, you are assuming that the only infrastructure needed is school related. There are sewer systems, hospitals, roads, police, fire, police, etc. Yes, I mentioned police twice - because you need a lot of them if you have a bunch of old people who drive around half drunk in golf carts all day.

Seems like a transfer tax would be a more equitable way of everyone sharing the burden of those costs.

Just sayin'.

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The Den
It's your democracy; use it.

Ok,

Let's tax old people too. I think we can balance a budget. lol we can call it a birthday tax

Tax dead people.

Not the old "death tax" . . . not a tax for dying. More for actually being dead. I can show you cemeteries full of 'em and you know what? At least they won't complain.

We already have a birth tax

It's called the National Debt. $8.8 Trillion or so and growing by more than $1.27 billion per day. Every child born today owes a $29,171.62 portion of that.