April 01, 2009 — Austin
This week, more than 1,500 Texas Realtors participated in the 2009 Legislative Hill Visits at the Texas Capitol on March 31. Consisting of hundreds of meetings between Realtors and legislators, this session’s record attendance underscored the importance of avoiding public policy that increases the cost of homeownership at the worst possible time.
“We’ve been fortunate in Texas to side-step the brunt of the economic downturn so far. However, at this fragile time, we need to protect homeownership opportunities, not make them more expensive through bad policies like real estate transfer taxes,” said Brooke Hunt, chairman of the Texas REALTORS®.
A real estate transfer tax is essentially a sales tax on real estate. Several bills have been filed thus far in the 81st session of the Texas Legislature that propose such a tax in various forms, including Senate Bill 950, Senate Bill 934 and House Bill 3163.
The National Association of Realtors commissioned a study to analyze the effects of a transfer tax on real estate. The report assumed a tax rate of 0.5 percent and a $125,000 purchase price. Based on these assumptions, the cost of buying a home would increase by about $600 and home sales would decline by almost 3 percent. Additionally, the Real Estate Center at Texas A&M University concluded that the creation of a transfer tax on real estate may create more problems than it solves, costing the state $955 million in lost economic activity and eliminating 11,575 jobs.
Chairman Hunt continued, “I think we can all agree now is not the time to increase the cost of owning a home. Real estate transfer taxes are regressive, hurting low-income Texans the most, and could provide the tipping point to send our Texas economy in the direction of other, less-fortunate states.”
Another key issue discussed with lawmakers was property appraisal reform. Currently, all of Texas’ 254 counties define their own practices for appraising property for taxation without any statewide oversight or enforcement authority. Texas Realtors believes such inconsistencies create a system that is unfair for Texas homeowners and advocates for more transparency and accountability in the appraisal process.
To learn more about this important issue, please visit TexasRealEstate.com.