You know that your REALTOR® is your go-to professional who has your best interests at heart when you buy, sell, or lease real estate. But you may not realize all the things REALTORS® do behind the scenes that benefit you financially, as well. State and local officials frequently try to raise revenue by increasing existing real estate taxes and creating new ones. Thankfully, REALTORS® have been the driving force to defeat dozens of these proposals. Just how much money have these efforts saved you?
Taxes on Property Transfer
People in 37 states currently pay transfer taxes every time real estate changes hands. Not in Texas. REALTORS® have helped defeat several of these measures over the years. In some states, transfer taxes run as high as 3% of the property’s purchase price. Even a 1% transfer tax on the median-priced Texas home would total $3,000—money that can’t be used for a down payment or on home furnishings or on other expenses. For some Texans, that puts buying a home out of reach altogether.
Fees on Property Transfer
REALTORS® were also behind the effort to ban most private transfer fees in Texas. This practice allowed the owner of a property to collect a fee from all future buyers, even after that person no longer owned the property. A private transfer fee could add another $3,000 or more to a property transaction.
Sales Taxes on Fees and Commissions
If some elected officials had their way, you would pay sales tax on real estate agent commission and fees. That equates to hundreds of thousands of additional taxes-taxes that, due to the efforts of REALTORS®, don’t exist in the Lone Star State.
Even Higher Property Taxes
It may be hard to believe, but your property tax bill could be much higher. For decades, REALTORS® have strung together legislative victories in the fight against rising property taxes. These efforts include tax-rate reductions, expansion of money0saving exemptions, and rules that prevent taxing authorities from raising rates without approval from taxpayers. In fact, these measures are a big reason why property taxes in Texas-while high-are still lower than some states that also have a state income tax.
Rest assured that REALTORS® will continue to work on keeping real estate taxes as fair, transparent, and as low as possible. You can learn more about property taxes here.