Tuesday, February 26, 2008
Orange County Commissioners decided to put on the May 6th primary ballot adding a 0.4% transfer tax that sellers would pay on the sale of property in Orange County.This tax would be in addition to the 0.2% tax that sellers already pay when they sell their homes.
This decision was made despite overwhelming opposition to the imposition of another tax on property. Two opinion polls were conducted among likely voters and both indicated majorities against the Transfer Tax.
The decision was also made not to allow voters the choice of restoring a 0.25% sales tax that was removed last year. Despite opinion polls indicating majority approval of that revenue option, and a new Orange County budget department projection showing that the expected future revenues from the two taxes are expected to be similar.
The Commissioners reasons for choosing the Transfer Tax over the Sales Tax are that they think the sales tax is regressive. Unfortunately, this position ignores the regressive nature of the Transfer Tax which is simply a sales tax on homes. The Transfer Tax disproportionately impacts lower income property owners; it has no exceptions for affordable housing, non-profits, or churches; and it will be imposed on short sales and even the sale of conservation easements. Conversely, the sales tax exempts food and medicine, diluting its regressive nature, and would be spread among the many visitors to Orange County who spend liberally when visiting UNC and our many fine other amenities.
Nonetheless, this May, the voters will only get one option from which to choose.
Realtors in the community will continue to represent the interests of property owners and oppose this option for raising new revenue. We will also continue to encourage the Commissioners to reconsider allowing voters to choose the sales tax option and to vigorously pursue responsible economic development to increase and diversify our tax base. It is the lack of commercial development that has placed such pressure on property taxes in the first place. In opposing this tax, we will be joined by many organizations and individuals who have voiced their opinions thus far.