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Grantors Tax Declared Unconstitutional
Grantors Tax Declared Unconstitutional
No matter how busy we can get at times, sometimes some bits of information warrants special note. And though if you are reading this, you might know already, but I am excited to tell it if you don’t. I just found out today that the Virginia Supreme Court decided to rule that a regional authority created by the General Assembly to enforce seven (7) different taxes and fees for various Northern Virginia transportation projects is unconstitutional. The Northern Virginia Transportation Alliance, though with honorable intentions of doing something about some of the traffic ills of this region, attempted to raise more money by taxing home sellers to fix transportation issues. Many of us at the Dulles Area Association of Realtors (the only Realtor Association in Northern Virginia who did) were opposed to charging homeowners a so-called “farewell tax” five times more than previously. As I mentioned in an earlier blog, we truly felt that the hardship experienced by many owners throughout the region due to decreased values of many homes in many neighborhoods didn’t need to “have salt added to the wound” (especially if they already had to bring money to the table to settle) in order to sell their homes. I too read the recent Board of Supervisors 24-page report on the destabilizing affect of the sub-prime “mortgage meltdown” specifically here in Loudoun County. Though the number of foreclosures in Loudoun increased by a whopping 800% between 2006 and 2007, this rough period will pass. Again, I am fully aware of many heart-wrenching stories throughout the region. Many have lost their home and seen values and equity drop. We couldn’t refinance our own home if we wanted to. Some states and regions will undoubtedly fare much worse. Don’t fret, please go back to my very first Blog. It introduces me, but it also should provide you with hope in the big picture of this area.
But I digress...Getting back to the task at hand. To give you a brief example of what I’m talking about, up until Jan 1st of this year, if you sold your home for $500,000, you had to pay a Grantor’s Tax of $500. After Jan. 1st (and up until today) you had to pay $2,500. To quote one of my most respected mentors in the business:
“We recognize the need to raise money for transportation but reliance on a home seller’s tax to fund necessary projects to ease traffic congestion not only places a large burden on one segment of the population but is an unpredictable source of revenue” said Candice Bower, 2008 DAAR Chairman.
It is so true that we need to find a solution (probably several) to deal with transportation issues that will inevitably increase over the years and decades. Perhaps Richmond can distribute its wealth a little bit more to the “Economic Powerhouse” of Northern Virginia? However, I choose to not discuss politics in this forum (it’s really done in so many more places and by more qualified people.
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