ARIZONA REAL ESTATE TRANSFER TAX,

By
Real Estate Agent with Homesmart ~ Scottsdale ~ Tempe

 

ARIZONA REAL ESTATE TRANSFER TAX (RETT)  -  ONE MORE BURDEN ON TAX PAYERS  

 

Arizona Real Estate Transfer Tax

A few months ago, members of the Arizona Association of REALTORS® (AAR) received an informational mailing titled Support the No New Home Tax Ballot Measure.     Did you read it? 

Since this has come up in the past, AAR wants to stop the RETT, for good this time, by adding it to the November 2008 ballot.

For those who are not familiar with this type of taxation, following is some information from the AAR flyer. 

Just what is a Real Estate Transfer Tax?   A state and/or local tax or fee imposed on real property that typically, is assessed according to the sales price of real estate property, when transferred.  Other states transfer taxes range from .001% to 2.2% and once initiated, the rate can increase to meet future legislative enactments. 

 

Problems listed include:

Creates Double Taxation - Governments already collect taxes on your property based on its value.  A RETTArizona Real Estate Transfer Tax would be an additional tax impacting your home or property.  

Damages Equity - The overall equity earned by the seller is reduced by a tax on the total value, including the amount you owe on your mortgage(s). 

Impacts Lower Incomes - Lower income households typically spend a larger percentage of their income on their home.  A RETT would impose a higher tax burden on teachers, police officers, fire fighters, health care workers, etc. 

This website has more information and is definitely worth reading.

I would like our status on this list to remain as is.  How about you?

One last thought, this affect buyers and sellers alike.  In a buyers market, like we're in right now, the seller would be forced to take the hit.  In a sellers market (think 2005) the buyer could end up being forced to 'pay' the tax.  So, the price of a home will be affected no matter what the market is.

I'd like to know what others in Arizona, both REALTORS® and consumers, are thinking and feeling about the Arizona Real Estate Transfer Tax. 

Also, if you are in a state or area that currently has a Real Estate Transfer Tax, please feel free to talk about what you know, think and feel about it. 

 

Real Estate TaxLinks to other articles and information about RETT

Protectourhomes.com

http://www.rallinow.com/

Real estate Lobby Pushing for ban on transfer taxes

Initiative would bar AZ tax on home sale 

FTA Bulletin

http://www.protectourhomes.com/files/shared/Key%20Points.pdf

http://www.protectourhomes.com/files/shared/Ballot-Highlights.pdf

 

 

SEVRAR members can pick up brochures at the office in Mesa.

graphics courtesy of iCLIPART

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Rainmaker
362,833
Dean Moss
Dean's Team - Keller Williams Realty Partners Chicago IL - Chicago, IL
Dean's Team Chicago IL Real Estate Team

Doreen-

Here in Chicago, Buyers pay $7.50/M for the privilege of buying a house here in the City of Chicago.  Sellers pay the city $3.00/M to sell it, plus an additional $1.50/M to the State of Illinois and the County in which they reside.

I here it is far worse back east.

Wouldn't it be nice if we can earn money as easily?

And, yes, Transfer Taxes can dampen demand, or news of them could keep more potential buyers on the fence.  Just what we need right now - yes?

DEAN & DEAN'S TEAM CHICAGO

Aug 01, 2008 12:25 AM #1
Rainer
213,039
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

Yes, more fence sitters or those never jumping off.  Just what we need. 

Aug 01, 2008 12:32 AM #2
Rainmaker
142,312
Barbara Carter
C21 Alliance Realty Group - New Paltz, NY
Hudson Valley Barbara on 92.1 Lite Fm

Doreen- In NY Transfer Tax is $2 for every $500 or any fraction thereof. The tax is paid by the seller in most cases. New York City levies an additional 1% on one-three family homes under $500,000- and there is a higher city tax on other sales. Some local taxes are also levied.

State mortgage tax is imposed at a rate of $.75 / $100. and some counties add an additional $.25.

Since th transfer tax is usually paid by the seller it is not really an issue for the hesitant buyer.

Aug 01, 2008 07:57 AM #3
Rainer
213,039
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

Barbara,  That sounds like a lot!  How do people afford it? 

Aug 01, 2008 03:51 PM #4
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Doreen - this has become common in many states. In Georgia there is also a tax on mortgages, the the borrower pays. It is actually significantly higher than the transfer tax. Let's put the borrower further in debt.

Yup, they get you coming and going.

Aug 01, 2008 04:09 PM #5
Rainmaker
225,023
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

We also have RETT in California. What we have been fighting is the PTT, or Private Transfer Tax. This is a tax that can be put on by any builder (Lennar started the game) OR any private enterprise. For example, a developer want to build a tract, some environmentalists threaten to sue - the builder offers them a deal. Don't sue me and I'll add a tax to these homes so that anytime they're sold in the next 20 - 100 years, you get .05 to 2.5% of the sale price. You can do whatever you want with it, there's no oversight, you can spend it on yourself if you like, just let us build. Believe it or not it's legal here and last year our legislation to eliminate it was defeated. We did get one win in that at least they now have to notify buyers that this is attached to a property and they can't just sneak it on like they had been.

Aug 01, 2008 06:23 PM #6
Rainer
213,039
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

Mike,  Or worse, make it impossible for them to afford to buy a home in the first place. 

Aug 01, 2008 06:49 PM #7
Rainer
213,039
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

OK Gene,  You are starting to really scare me! 

It does kind of prove the the environmentalist are not really interested in or concerned about the environment.  (disclaimer: I am NOT against protecting the environment and I believe we are commanded to do so by God.  BUT, I have a HUGE problem with some of the organizations and people that think they know it all.)

Aug 01, 2008 07:00 PM #8
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Gene - sometimes I am glad that I got out of Hotel California.

Aug 01, 2008 07:26 PM #9
Rainer
213,039
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

Mike,  'You can check out any time you like, but you can never leave'  :) 

Aug 01, 2008 07:32 PM #10
Rainmaker
225,023
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

Not sure if they're atill in business but there was a company operating out of Houston that would teach you how to set up your own private transfer tax such that every time your home re-sold you would get a check for a percentage of the sale. Can you imagine the impact that would have on the market if it were to catch on. It's amazing how individuals and government think you can increase revenue by making housing less affordable.

Aug 02, 2008 11:36 AM #11
Rainer
213,039
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

That doesn't sound legal...

Aug 02, 2008 02:36 PM #12
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Rainer
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Doreen McPherson

Phoenix Arizona Real Estate ~
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