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Will the Pennsylvania State Government increase the Realty Transfer Tax

I have spent the last couple of days visiting Harrisburg for a Government Affairs Seminar sponsored by the state association, PAR. I found it very interesting and intend to post some blogs over the next few days on different issues. However, what had motivated me to go and become more involved was the constant news that State Government was considering increasing the Realty Transfer Tax.

Whilst it is not in Governor Rendell's Budget, it is in three counter proposals in varying degrees, but these also allow local municipalities to also increase the tax as well.

We met with several Representatives and Senators to put our point accross which is

  • The PA Realty Transfer Tax is already one of the highest in the country, only Delaware, the District of Columbia, New Hampshire and Washington state are higher.
  • The PA Realty Transfer Tax exceeds that of 6 of our neighboring states.
  • The transfer tax has a very narrow base because it is a tax on a single item, the value of property when ownership is transferred from one party to another.
  • The transfer tax is regressive and fails to take account for the fact that lower income home owners spend a higher percentage of their income on housing than do higher income households.
  • The transfer tax is highly volatile and dependant upon market conditions, just in quarter 3 for 2006 under the current rate tax income fell by about $23 million as the market declined.
  • Transfer tax is a barrier to home ownership.

 I also feel an increase will make the state less apppealing to businesses that recruit executives or transfer executives here for short periods of say three to five years. Another point raised today is that a raise will affect the passing on of farms to children as the property is more highly taxed.

Please make your voice heard, write to your representative to not allow any increase in the Realty Transfer Tax and to look for broader based tax alternatives.

If you are buying or selling on or around Tredyffrin Easttown or along the Main Line we can help you,  contact us or connect

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Comment balloon 7 commentsNick Vandekar, 610-203-4543 • March 07 2007 07:31PM

Comments

Nick, you are absolutely right.

Even though the RTT is off the table in the current proposal, it is entirely possible that the current legislature (with over 50 new members after novemeber's election!) might put it right back in the mix.

As Real Estate Professionals who may have a better understanding of how the Transfer Tax works in practice (as opposed to theory) we can educate them, and help them better understand the issue before they vote on raising a tax that already can prevent a buyer from having the funds needed for closing.

PAR Government Affairs Seminar is my overview of the event.  Thanks again for sharing your hotel room with me.  (By the way -- you snore, just as much as I do.)

Posted by Rich Schiffer, Referral Agent, e-PRO over 12 years ago

As always, I love your posts.  Thank you for your involvement in the community. 

I would like to become more involved in these circles.  Please give me a heads up on these events in the future or tell me where I might be able to find a calendar of upcoming meetings.

I now have a Home Finance blog with the Patriot News where I believe we might get more mileage out of this sort of post.

Posted by Gerry Stephens - Central PA Real Estate Market (Wells Fargo) over 12 years ago
Gerry, one way for you to get involved is to join the PAR as an affiliate member, and contribute to RPAC.  (I will be posting a separate topic about RPAC later.)  I suggest you contact your local Realtors Association headquarters, to inquire about the details.
Posted by Rich Schiffer, Referral Agent, e-PRO over 12 years ago

Well, the transfer tax was defeated, according to a letter I received from my representative.

HOWEVER, not sure if this has anything to do with it or not...but starting today, the state has shut down state parks and forests and furloughed 2300 state employees.

The GOOD news is that the casinos and liquor stores are going to continue to operate.  Great, I'll tell that to my kids when they want to go swimming at Promised Land State Park later today.  And I'm sure it will be a big consolation to all of the people who have reserved campgrounds for their vacations at state parks.

 

Posted by Karen Rice, Northeast PA & Lake Wallenpaupack Home Sales (Davis R. Chant, REALTORS) about 12 years ago
Well Karen, the parks and forests re-opened after one day and once again we see politicians make the rest of us suffer for their posturing. Could a deal have been reached without shutting down the state government? Most likely, but it is far more effective and allows everyone to lay the blame on their opponents rather than stepping up and accepting resposibility that once again party politics caused everything to grind to a halt.
Posted by Nick Vandekar, 610-203-4543, Tredyffrin Easttown Realtor, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 12 years ago

It was totally stupid, IMHO.  What a waste  and a lot of people were ordered to leave their campsites by midnight on Monday - only to have the parks open again on Tuesday...what a waste for everyone involved just to play political games.

 

Posted by Karen Rice, Northeast PA & Lake Wallenpaupack Home Sales (Davis R. Chant, REALTORS) about 12 years ago

Totally agree with you Karen, but this seems to be the state of politics throughout the nation, at state and national level. A lot of posturing and blaming everyone else but no one willing to actually work at improving things for the nation , the state or the people.

This is why we all need to vote and be involved in politics and elect those people who will represent the will of the people and are not just filling space.

Posted by Nick Vandekar, 610-203-4543, Tredyffrin Easttown Realtor, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 12 years ago

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