Local Politics

Beating transfer tax doesn't stop property tax increase

Posted September 19, 2008

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— Six of the 19 counties where a real estate transfer tax has been defeated at the polls have resorted to higher property taxes to meet their revenue needs.

State lawmakers last year approved a 0.4 percent tax on real estate sales as one of two local options for counties to generate additional revenue for growth-related infrastructure like new schools, roads or water and sewer lines. A quarter-cent local sales tax was the other option.

Since then, voters have rejected transfer tax proposals 20 straight times – the idea was defeated twice in one county – and lawmakers considered repealing the option altogether.

"Clearly, the voters are saying we don't want this type of tax," said Tim Minton, executive director of the Homebuilders Association of Raleigh-Wake County.

Developers and the North Carolina Association of Realtors have lobbied extensively to defeat the transfer tax, with the Realtors group committing $10 million to the effort.

In the face of such opposition, commissioners in Chatham County and five other counties simply raised property taxes.

"If we'd passed (the transfer tax), our property taxes would've stayed the same," said George Lucier, chairman of the Chatham County Board of Commissioners.

The transfer tax would have been $800 on the sale of a $200,000 home. Now, the owner of that $200,000 home is paying almost $1,300 a year in property taxes, compared with about $1,200 last year.

"What I think happened was that the real estate community and home builders ran a remarkably effective campaign against it – calling it a home tax," Lucier said.

Opponents spent $77,000 advertising against the tax in Chatham County.

While the failed referendum frustrates some, it is a relief to others.

"I just didn't like the idea of people being taxed and having to pay for selling their home," resident Claire Wilson said. "I just personally believe they would've raised taxes anyway."

Local restaurant owner Vance Remick said the transfer tax was needed. It taxes the seller, but he said the cost could be passed onto the buyer to help pay for growth.

"(It would) make sure the people coming in are paying their fair share for schools and the things we need to be doing," Remick said.

Minton said he believes the tax will continue to fail at the polls. Polk County is the only county in North Carolina to have it on the ballot in November.

"I think, clearly right now, with the housing market and real estate in flux, it's not a good time to hold a referendum," he said.

But Lucier and others in Chatham County said they believe the tax will eventually pass somewhere.

"Anything that's new takes awhile to understand," Remick said.


This story is closed for comments.

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  • BuglessDuster Sep 19, 2008

    I think instead of a transfer tax we should have a "transient tax." The reason we need new roads, schools, buses, bridges, etc. is due to all the people moving here from out of state. Shouldn't they be the ones to pay for it since they are creating the demand? If you move to NC from another state, you should have to pay higher state income tax for five years to offset your impact to the area. Now THAT'S fair.

  • bs101fly Sep 19, 2008

    Fair Tax ain't NEVER gonna happen, keep dreaming.

    Take the property tax hike Tim Minton! HA!
    Should've kept your mouth shut, now home owners will pay LOTS more because of YOUR greed!

  • Tax Man Sep 19, 2008

    We need the Fair Tax - get rid of all property, income, social security, medicare and sales taxes and implement the Fair Tax which only taxes consumption and does not tax the necessities of live. Any tax increase should require the vote of at least 2/3 of the registered voters! Fair Tax is the way to go. Take the politicians out of taxation! Watch out for Obama - he wants to tax you 28% on the sale of your home! Each time you sell a home with no exceptions. If you make any profit on the sale of a house you will have to pay the tax if he has his way. That is because the "middle class" don't own homes, they rent, according to Obama, so only the rich will pay this capital gain tax!

  • ridgerunner Sep 19, 2008

    When will the commisioners learn that the people do not want the transfer tax? Property taxes do go up and it is more fair and equitable than the transfer tax.

  • whatelseisnew Sep 19, 2008

    Ah yes "we have to pay" - and the reason is because people that think like that do not vote out the people that continually raise taxes. Voters can send a loud and clear message by voting out anyone at any level of government that raises taxes.

  • nodoginthisfight Sep 19, 2008

    This isn't news in Orange Co. the commissioners office made it clear that even if the transfer tax passed property tax would go up" just maybe not as much". If anyone really believed that one I've got a bridge for sale "cheap"

  • US VET Sep 19, 2008

    Tax, Tax, Tax, Clearly taxation without "proper" representation... Time for citizens to rise up in arms against repression.

  • readerman Sep 19, 2008

    I remember the old commercial for Fram oil filters. "Pay me now or pay me later." We have to pay for services one way or another. I for one, don't want my house to be on fire and get a bust signal at 911. Counties only have so many ways to raise revenue and if one way fails (transfer tax) they will have no choice but to use another way such as raising property taxes. Based on the voting on the transfer tax, most people in North Carolina chose to raise their own property taxes.