I don’t typically take a political stance in my blog but I strongly support an upcoming constitutional amendment being considered. Oregon does not currently have a statewide real estate transfer tax. A real estate transfer tax is a state or local government imposed tax that is collected when you transfer ownership of your home, land or commercial real estate and depending on what the law stipulates, must be paid by either the buyer or seller or split by both parties. Typically, once the tax is initiated, the rate can be increased by the state, county or city at any time. During the last 5 legislative sessions there have been 10 attempts to authorize such a tax. There is a current effort to place a measure on the upcoming ballot that will amend the state constitution and permanently prohibit the imposition of real estate transfer taxes in Oregon.
As a homeowner in Oregon, you already pay taxes on your property based on a portion of your property’s assessed value. A transfer tax would impose a second tax on your home or property at the point-of-sale. This tax is imposed whether there is any equity in your home or not. Currently 36 states impose real estate transfer taxes and the tax rates range from 0.1% to 4% of the sales price. Imagine you sell your home at a loss for $300,000. In addition to your typical closing costs, you also have to pay a 1% transfer tax of $3000. Or imagine you’re a home buyer with a very limited down payment. In addition to your down payment and closing costs, you also have to come up with a percentage of the sales price to cover the transfer tax.
In the current economy, many families are being forced to sell their homes because of a job loss or pay cut. With home values dropping, many are selling at a loss. It is unfair to impose additional taxes on people who are already facing severe financial hardship. Furthermore, Oregon’s housing market is struggling. A real estate transfer tax will make it harder and more expensive for people to buy or sell a home.
This measure needs more than 150,000 signatures of registered Oregon voters turned in to the Secretary of State by July 2, 2010, in order to qualify for the November ballot. If you’re interested in signing in support of prohibiting a real estate transfer tax, please contact me.