RALEIGH – The North Carolina Association of Realtors today released a white paper policy report that documents the downside to real estate transfer taxes now collected in six counties across the state.
“This report shows that revenue generated by real estate transfer taxes is down in Dare County and that pricing for housing along the Outer Banks is more than double the state’s average,” said Tim Kent, executive vice-president of the NC Association of Realtors.
“In fact, the Dare County commissioners have been forced to cut spending to adjust for the deep decline in revenue collected from real estate transfer taxes. So the notion that all is well in the counties that have real estate transfer taxes is more fallacy than fact,” Kent stated.
“Some people want to paint a picture that the home taxes they are proposing won’t impact consumers, but recent news reports clearly show that Camden and Currituck counties have moved to higher impact fees on the buyers of new homes, more than $10,000 per home, to supplement their real estate transfer taxes,” Kent added.
Other states that have implemented the real estate transfer tax have also seen steep declines in revenue. An April 7, 2007, report in The New York Times reports a 22 percent decline of real estate transfer taxes collected in Maryland. This decline confirms a drop in the regional housing market and an overall downturn in property values.
“The home tax is not a tax on growth – it’s a tax on the men and women who have worked hard, invested in their home and played by the rules. Taxing the equity in their homes is like taxing the American Dream, it’s a bad idea,” Kent said.
Kent said the white paper report was being released to counter efforts by local officials to showcase the home tax during the N.C. League of Municipalities’ legislative lobbying day. “The home tax is a narrowly-based tax that impacts people who are already here and doesn’t address the real problems with funding growth-related issues,” Kent said. “Last week’s revenue report shows North Carolina brought in $1.1 billion more in tax revenue than in anticipated tax dollars during the first 10 months of the fiscal year. Our state doesn’t have a revenue problem, so taxing the equity in our homes isn’t necessary or justified,” Kent concluded.
Click here for a copy of our white paper.