Are Property Taxes Going Up?!
As a homeowner, landowner and county commissioner, I hope not! I am writing this letter to hopefully better explain the upcoming vote by the residents of Ashe County on a “land transfer tax” and its benefits over having to raise property taxes.
The upcoming fiscal 2008/2009 budget for Ashe County is going to be one of the most conservative in many years. It will definitely be a maintenance budget and not an expansion budget. Many factors play into this budgeting plan such as increases in operating costs, fuels and electricity, new debt to pay for library renovation and expansion, buildings and grounds upkeep, and maintenance for our schools, also the new law enforcement center and jail.
With the budget season coming upon us, the commissioners have begun having “revenue initiative” sessions. We are looking at our options to be able to pay for these coming expenses. We were informed by the county manager and finance officer that it would probably take a 3.8 cent to 4.0 cent increase in property taxes to cover the expenses. So, the commissioners set out looking at all of our options. One option, cut services. Unfortunately, many are required and needed to keep our infrastructure updated and county government running effectively for our residents. Another option, raise taxes. Commissioners put that as a last resort.
In last year’s legislative session, counties were given two new revenue options. One is a one-quarter cent sales tax and the other is a 4/10% “land transfer tax.” We looked at the sales tax option but for several reasons chose not to use it. One, it did not seem the most fair because full time residents were paying it all the time, and seasonal residents only paid-in part-time. Another reason is this sales tax would only generate part of the revenue we need and would probably be coupled with a smaller property tax increase. The other option we had is the “land transfer tax” of 4/10%. After much debate and discussion, this seems the best overall option.
The “land transfer tax” is a tax on land and building sales.
Now let me try to answer your questions and concerns. As the statement says, the tax is on land sales. There are exemptions to the “land transfer tax.” If you give your children or grandchildren some land, there is no tax! If you inherit land or property, there is no tax! If nothing of value is provided in exchange, there is no tax!
Who is to pay the tax? The law set by the General Assembly says the seller. But, as desirable as land in Ashe County is to own, a seller could just charge the buyer the tax amount and go on.
Okay, we are basically looking at two options to pay for our coming needs, a “land transfer tax” or “property tax increase.” So, lets crunch some of the numbers I have given you. On a home and lot valued at $250,000 on the tax books, a 4-cent raise in property tax will cost the current homeowner another $100 per year! That’s the fallout for current owners with a property tax increase! Now if someone comes to Ashe County and buys a lot, home or piece of land and pays $100,000, the “land transfer tax” is $400. That is if the voters pass this on the May 6 ballot. Hold on, I hear the next argument coming: “We are picking on the people coming into Ashe County.” I personally say “not so” and here’s why: If I am a person looking to buy land in Ashe County and the county has implemented the land transfer tax, on a purchase of $250,000, I will pay $1,000 once on the purchase of the property. If I buy the same $250,000 property and the commissioners have had to raise property taxes by 4-cent, once I own the property, I will pay an additional $100 every year in property taxes. So, if I were buying Ashe County property, I would much rather have the one time tax and not a continuing tax burden. Homes are a major purchase and usually held for many years. In the long run, the land transfer tax would cost less than a continuing annual property tax. As a homeowner, landowner, and county commissioner, I am going to choose the “land transfer tax” over a property tax increase! Wouldn’t you?! Please vote “for” the Land Transfer Tax on the May 6 ballot to keep property taxes low.
Marty Gambill
Ashe County Commissioner
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