Com­mis­sion­ers leave ex­emp­tion off trans­fer tax

Board keeps amend­ment that gives no re­lief to first-time home buy­ers

Maryland Independent - - Front Page - By MICHAEL SYKES II msykes@somd­news.com

De­spite the pub­lic out­cry for a first time home buyer trans­fer tax ex­emp­tion, the Charles County Board of Com­mis­sion­ers moved for­ward with­out it on Tues­day by ac­cept­ing the bill as orig­i­nally amended.

The amend­ment to the orig­i­nal bill re­moved the first time home buyer ex­emp­tion and made trans­fer tax rev­enues payable to the county trea­surer rather than the Clerk of the Cir­cuit

Court.

Charles County’s as­sess­ments on prop­erty val­ues in­creased last year and the pop­u­la­tion con­tin­ues to in­crease by 1.3 per­cent on av­er­age year to year, but some still feel the county needs a first time home buyer ex­emp­tion on the county’s trans­fer tax.

Mary Stok­ley of La Plata said first time home buy­ers are of­ten young peo­ple look­ing for their first prop­erty. Be­cause of the many “dis­tressed” prop­er­ties in the county that have been fore­closed on, Charles County is fre­quented by first time home buy­ers, she said.

Banks are ex­empt from all trans­fer taxes in­clud­ing the state’s, Stokely said, and that leaves home buy­ers bear­ing the brunt of the amount which is set at 0.5 per­cent cur­rently.

“In ad­di­tion to the rel­a­tively new county trans­fer tax they also have to pay 100 per­cent of the state trans­fer tax,” Stokely said. “The state col­lects it be­cause they col­lect it from the buyer. The seller is not ob­li­gated to pay it.”

The homes that are pur­chased are not al­ways rea­son­ably priced, Stokely said. The trans­fer tax has ben­e­fited the county with more rev­enue, but with no ex­emp­tions the county is lim­it­ing the amount of peo­ple who can af­ford to buy homes in Charles County.

Katie Stickel, a real es­tate in­vestor and a county res­i­dent, said the ex­emp­tion would have been an “eco­nomic stim­u­lus” for the county. New home­own­ers spend the money they have avail­able to them on fur­ni­ture, ap­pli­ances, equip­ment and other things to im­prove their homes, she said.

Stickel said the ex­emp­tion would at­tract home buy­ers into the county and al­low them to spend money at other places within the county in­stead of keep­ing their dol­lars out.

“This stim­u­lates the lo­cal econ­omy through other busi­nesses that will ben­e­fit from those dol­lars,” Stickel said. “In turn, those other busi­nesses will grow here and hire peo­ple here. And that’s what we need. We need jobs here, not go­ing up the road.”

The county had to re­move the first time home buyer ex­emp­tion from the trans­fer tax bill af­ter the Charles County Cir­cuit Court ruled that the ex­emp­tion was not le­gal be­cause it was not a manda­tory ex­emp­tion.

Sec­tion 13-409 in the state’s tax ar­ti­cle says the county could pro­vide ex­emp­tions for home­own­ers who have never owned real prop­erty and were never prin­ci­ple own­ers of a prop­erty in the state.

County Com­mis­sion­ers’ Vice Pres­i­dent De­bra Davis (D), who was in fa­vor of al­low­ing an ex­emp­tion, said the county has put it­self in a po­si­tion where the dis­cus­sion around the trans­fer tax is “moot.”

Be­cause the com­mis­sion­ers passed a bal­anced bud­get last week with the trans­fer tax in­cluded and no ex­emp­tion for first time home buy­ers, Davis said, dis­cus­sion on whether it should be in­cluded in the bill is hard to have.

“Un­for­tu­nately, we’re not po­si­tioned. I know that we moved re­ally fast to put this tax in ef­fect and I hope we’ve learned from our mis­takes and will have more pub­lic in­put in the fu­ture,” Davis said. “That’s all I have to say.”

County Com­mis­sioner Bobby Rucci (D) said he is in fa­vor for where the money is be­ing moved, but he is not in fa­vor of re­mov­ing the first time home buyer ex­emp­tion.

“If we didn’t have this trans­fer tax, the bud­get would have been tough this year,” Rucci said. “And, ba­si­cally, the sell­ing of homes is what gave us this ex­tra money. And we didn’t give noth­ing back. That’s the thing that both­ers me a lit­tle bit.”

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