Could Land Transfer Tax Pay for Wake Growth?
Posted September 20, 2007
Raleigh, N.C. — A citizen's group, Wake Up Wake County, is pushing for the county to vote on implementing a land transfer tax, which it said could make growth pay for itself.
The 2007 General Assembly gave permission for counties to seek voter approval for a 0.4 percent transfer tax that owners would pay when selling any piece of real estate. In Wake County, the tax could raise an estimated $50 million a year.
Tax proponents said that money could fund the county's infrastructure needs amid rapid growth.
"Our population is due to double in just 20 years, and we've got to plan for the future," Karen Ridge, with Wake Up Wake County, said. "We've got to figure out fair ways to pay for the infrastructure needs that come with growth."
Some realtors, though, said the tax could hamper the very growth it's meant to sustain, tightening the housing market and making sales more difficult to make. Builders have also opposed the tax, saying it unfairly singles out a small segment of the population.
"If we have to raise taxes, we can raise it another way. There are plenty of other ways to raise revenue," said realtor Martin Hill.
The amount of revenue produced by the tax would be unstable, according to realtors opposed to the tax.
"How are we going to budget with it? We don't know what it's going to be from year to year, because that's market-dependent," realtor Phyllis Brookshire said.
County officials told WRAL the transfer tax would pay for building new infrastructure, primarily schools. It could also cover construction costs for new roads or water and sewer lines.
Realtors and builders bitterly fought the General Assembly's passage of legislation allowing county referendums on the tax. The Legislature reduced the permitted transfer tax rate from 1 to 0.4 percent and gave counties the option of raising sales taxes by 0.25 percent instead if they want more revenue.
Chatham, Johnston, Harnett and Moore are among 16 counties that will have the transfer tax on the ballot this fall. Chatham County officials are holding a series of five education meetings about the tax.
Wake County commissioners said they definitely plan to place the land transfer tax on the ballot in fall 2008. Meanwhile, Wake Up Wake County is planning its campaign to get it passed.
"We're all in this together," Ridge said."And making sure that we continue to have strong schools benefits the real estate and development industry. And they know that."