Long time real estate professional, David Hardie, joins us to talk about real estate transfer taxes.
A real estate transfer tax happens when a property is transferred from one party to another. Most commonly this is when a property is sold. This is separate from property tax which is due each year based on the assessed value of a property.
Over the past two years there have been two attempts in the Wyoming House to allow counties to create these transfer taxes. Both failed before making it into committee. Most recently, Representative Andy Schwartz sponsored a bill in 2018 that would have allowed counties and cities to elect to impose a real estate transfer tax. It included many exclusions so that property transfers between families, tenants and all industrial, mineral and affordable housing properties are excluded. If the property transfer tax was approved by the voters in Teton County, it was expected to generate $5-6 million for the city and county each year.
There are two primary reasons people oppose this type of tax. Some are ideologically opposed to taxes including those legislators who have a to signed the no-tax pledge and others are opposed to a the new tax if they see that it will negatively affect them monetarily like the National Association of Realtors. Local realtors seem divided on the issue because good infrastructure that is paid by taxes help support property prices.
39 other states have real estate transfer taxes and 6 of those have progressive taxes that have higher rates for more expensive properties. One interesting comparable to Teton County is Vail, CO. Vail implemented a real estate transfer tax in 1979 and has had no perceivable affect on property sales.