Sunday, June 21, 2009

Realty Transfer Fee too much for sellers

Since 2003, this tax has increased over 80 percent, and with the added municipal home sales tax, it would make it 103 percent since 2003. - Joe Sinagra

I recently read a letter to the editor pointing out that many people are unaware of the sales tax on homes.

I read it with intense interest because I'd love to sell my home and move away from New Jersey … move far away. But now the times do not favor sellers — prices have dropped because of the economy, banks are not giving mortgages because they have suffered tremendous losses from uncreditworthy borrowers, and mortgage interest rates have begun to inch higher. So, I'm stuck.

To think that there's a tax, a stealth sales tax, on top of all the other expenses in selling a home, is just too, too much to contend with.

This Realty Transfer Fee (RTF) that the letter writer, Joe Sinagra, a state Assembly candidate for the 18th District, discusses, is an insidious tax. It was supposed to help support the recording of real-estate transactions. I assume books, records and maps are all brought up to date. Well, how much money does it take in this age of the computer to record real-estate transactions? The costs should have gone down.

Sinagra points out that since 2003 when Jim McGreevey was governor, the state increased the tax more than 80 percent, and municipalities increased it 103 percent. There's no end to it. Reverse the RTF and end it. The county clerk's office, where all these transactions get recorded, did not become modern and efficient.

The state and the municipality receive more and more from the sale of the home just through normal growth and development. The population of New Jersey in 1960 was 6,066,782 — the RTF began in 1968. The population of New Jersey in 1970 was 7,171,112, an 18 percent increase. The population of New Jersey in 2008 was 8,698,879, a 21 percent increase over 1970 and a 43 percent increase over 1960. That means more homes, many more. That means an increasing revenue stream.

Even if you live out of state and own a home in New Jersey, you are still subject to a 2 percent fee. How about people who liveout of state and inherit a home in New Jersey? More revenue.

What interests this governor is more tax revenue, all at the expense of the individual sellers. Sinagra points out that 57 percent of the tax money goes to the state's general fund; 19 percent, state's Extraordinary Aid Account (EEA); 18 percent, Neighborhood PNRF; 18 percent to the counties for general use; 7 percent, Public Health Priority Fund. Not one of those funds is for the recording of real-estate transactions.

If the government is collecting money for a specific purpose and then it decides to divert the money to other areas, then it's time for us to decide to vote against the current officials in government, like the incumbents.

Cheryl Bass

No comments: