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Effect of 1% Land Transfer Tax on other counties

By Mike Cross
Posted Saturday, May 14, 2005

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I sent the following request to the six counties who have implemented the 1% Land Transfer Tax Option as stated in HB 1062: "Will you please provide a short "statement of effect" as to how the 1% L.T.T. is benefiting your county as a revenue source for capital improvements and the status of your local real estate industry?"

Perquimans County

"We rely heavily on our Land Transfer funds for our school projects. Our county ranks 95th out of 100 in sales tax receipts, and part of those funds as you may know are earmarked for school capital funding. The Land Transfer Tax makes up for that and also for ADM funds that may be withheld from the counties. We are able to make necessary capital improvements that would otherwise have to come from increased property tax or financed over a period of time.

From 1993 to 1999, there was essentially no growth in our annual land transfer revenues. In 1997-1998, we received only $177,348 in land transfer tax. This current year, we are on pace for $725,000. We've averaged almost 30% annual growth the last 4 years. We are issuing about double the amount of dwelling permits now than we were just a few years ago. Due to our proximity to the Tidewater, Va. metropolitan area and the amount of waterfront property, we are seeing more residential development activity than Perquimans County has ever experienced.

Land Transfer revenues has been and will continue to be integral to our school capital improvements."

Bobby C. Darden, Perquimans County Manager

Currituck County

"In a word: Schools. Currituck County is recognized as the 17th fastest growing county in the Country and like most other communities, this growth challenges our ability to provide public education. If not for the Land Transfer Tax, we would fall further behind in our school capital needs and would have had to raise our property tax several cents. We have been able to build a middle school and renovate two elementary schools without incurring any debt thanks in large part by a good working relationship between our Commissioners and the Board of Education, good planning and effective budgeting of the Land Transfer Tax. As an aside, we have just completed our revaluation and our County tripled in valuation so I am hard pressed to see where the Transfer Tax has had any negative impacts on the building practices here."

Dan Scanlon, Currituck County Manager

Pasquotank County

"We are one of the fortunate counties that have the land transfer tax. I will be glad to provide any information about the success of the tax in our county if you need it. It has worked very well here and it has not hurt the real estate industry at all. In fact, our land transfer tax receipts have increased by 50% per year for the last two years. We anticipate that we will receive $2 million by the end of this fiscal year. All of the counties in the Northeast that have the land transfer tax are having problems with too much growth instead of the reverse."

Randy Keaton, Pasquotank County Manager

Dare County

"Dare County enacted the tax in 1986. That first year we collected $1.2M. We are now collecting that amount every month. This past year (2004) we collected $12.5M.

Building permits are a good barometer of whether or not the industry (Realtors, Home Builders) are affected by the implementation of the Land Transfer Tax. In 1995 we issued 1,713 building permits valued at $96M. In 2004 we issued 3,464 building permits valued at $295M. That's $24M per month.

There is no statistical data anywhere in Dare County that the land transfer tax has hurt the industry (Realtors, Home Builders) in Dare County."

Terry Wheeler, Dare County Manager

Chowan County

"Chowan County was the second county in the state to adopt the transfer tax. The monies are dedicated for capital outlay purposes. Transfers within the Town of Edenton are divided 50%-50%. I believe all the real estate agents in the County will confirm that the transfer tax has not impacted real estate sales in a negative manner but in fact has facilitated sales through improved infrastructure, schools, etc."

Cliff Copeland, Chowan County Manager

Camden County

"The land transfer tax has been a tremendous resource for Camden County. Currently the tax is generating in excess of $500,000 per year that the county uses for capital needs. This is a major revenue producer considering this county's budget is less than $10 million. Even with the subdivision moratorium in place for the past 18 months the amount collected has been increasing. We are using a portion of it to cover debt service payments on land the county purchased. If it were not for the land transfer tax Camden would be in a severely financially strapped position. We use these funds for all sorts of capital needs that otherwise we would not have the ability to provide."

Randall Woodruff, Camden County Manager

The above information has been sent to all members of the General Assembly.

"Crossover Date" has been extended to June 2, so we still have some time to send support Emails. If you haven't done so - Please help with this effort quickly! If you have sent Emails of support, certainly, you can send additional Emails with this new information."

 
Related info:
Mike Cross' Weblog
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Effect of 1% Land Transfer Tax on other counties
Chatham County Commisioner Mike Cross shares his viewpoints with citizens on his weblog.


Related info:
Mike Cross' Weblog
 
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