news-record.com

As local, county and state governments face growing ­— and sometimes desperate — economic needs, they increasingly turn to real estate transfer taxes as a source of funding. This is a tax that may be imposed at the closing of home sales or other real property transactions.

These taxes typically range from .01 percent to 4 percent of the sale price. It can be paid by either the buyer or seller, or shared by the parties.

“Unlike property taxes, real estate transfer taxes are state and local taxes that are assessed on real property when ownership of the property is transferred between parties,” according to a report by the National Association of Realtors.

“These taxes are used in many areas to fund programs designed to preserve rapidly depleting open spaces in commercial or residential areas, and to fund housing programs for low-income residents.”

Some states have a variety of transfer tax laws, which may include specific exemptions for certain types of buyers based on buying status or income level.

One state, for example, exempts certain first-time buyers from a percentage of the total or excludes a portion of the property’s sales price from taxation altogether.

Transfer taxes are not without controversy. Most real estate professionals view them as another obstacle in encouraging home ownership and achieving recovery in our struggling housing market. This is the worst time to impose such a tax, many property owners believe.

Why aren’t more people buying and selling homes these days?

One recent study shows that prospective homebuyers believe now is a good time to buy, given today’s low home prices and low mortgage interest rates.

But potential sellers are nearly unanimous in reporting that it is not a good time to sell a home.

They cite difficulty in finding buyers at desired sales prices, according to a study released by the Mortgage Bankers Association.

The study, titled “The Great Recession and Attitudes Toward Homebuying” was sponsored by MBAs Research Institute for Housing America.

It utilizes 30 years of data from the University of Michigan’s Survey of Consumer Attitudes to examine consumer attitudes toward homeownership before, during and after the most recent recession to see if consumer sentiment changed toward the buying and selling of homes.

To find out more about Jim Woodard, visit the Creators Syndicate website at www.creators.com.