Preventing a possible tax on home sales
Measure 79 would close a loophole that allows the state to impose a real estate transfer taxProponents of Measure 79 have characterized it as a preemptive move to ensure that the Oregon Legislature never levies real estate transfer taxes on home sellers.
Right now, nobody in Crook County or the rest of the state faces the possibility of a transfer tax when they sell a house. State law prohibits city or county governments, districts, or other political subdivisions from imposing such a tax.
However, at this point, the state legislature has the authority, subject to governor approval, to levy such taxes or change the current statutes regarding them. Consequently, realtors and other Measure 79 proponents want to change the law to rule out that possibility before it is too late.
“I think the fear is that because governments are looking for any way to generate additional revenue to fund government, this is a potential loophole that is available to them,” said Prineville realtor Steve Uffelman.
In the current economic climate, realtors believe a transfer tax would diminish or even eliminate the income that home sellers could collect from a sale.
“It’s very difficult in many cases for many people to break even on the sale of a home,” Uffelman said. “To tack a tax on the sale of a home is essentially going to make a number of transactions upside down.”
Realtors are not the only ones who support Measure 79. Senator Doug Whitsett (R-Dist. 28) has concerns about a future transfer tax as well. He has so far seen no legislative drafts or bills that specifically tack on a real estate transfer tax. Whitsett did however note that the legislature passed a bill in 2009 that increased the document recording fee associated with the sale of real estate.
“That was nothing more or less than a real estate transfer tax,” he said. “It wasn’t designed to pay the cost of the recording and storage of the documents. It was designed to raise revenue for another purpose.”
Furthermore, Whitsett has heard rumblings from fellow legislators that appear to validate the concerns that prompted the measure.
“I have heard a number of different people discussing the pot of gold that is out there from the standpoint of a real estate transfer tax,” he said, “and part of that argument that I have heard is that we have – with Measure 5, and 49 and 50 – an unfair cap on the taxing of real estate, so why not tax it when they sell it?”
Not only do realtors fear that the transfer tax would harm home sales profits, they worry that it could discourage home sales in general. People might opt to forgo selling their home if they face a loss on the deal.
“That is not going to help anyone in the community, and especially when a home is most people’s biggest investment that they ever make,” Uffelman said. “To place or use a transactional tax on real property is unacceptable to us, because it does hurt so many people who are struggling very much right now.”
The 2012 general election will take place on Nov. 6. Crook County ballots will be mailed out on Oct. 19.