Charles County Commissioners mull exemption for transfer tax

County Commissioners talk about first time home owner transfer tax exemption ahead of May 10 meeting

The county’s real property transfer tax has been and continues to be a hot-button issue for the Charles County Board of Commissioners. During last week’s board of commissioner meetings, the board introduced two amendments to the transfer tax bill.

One amendment removed a first time home buyer exemption and the other changed where the transfer tax money is paid to, associate county attorney Adam Storch said.

The county’s real property transfer tax, which is set at 0.5 percent, is applied to Charles County residents when real property is transferred, such as mortgages, land or some buildings.

Rather than being paid to the Clerk of the Circuit Court in the county, the tax will be paid to the county treasurer in order to keep more tax proceeds in Charles County, Storch said. The revenues will go into the county’s general fund.

But County Commissioners’ Vice President Debra Davis (D) said she wants to include something for first time home buyers.

“I believe it was our intention to move forward with an exemption for first time home buyers. Because there was a problem with the way it was written, it was kicked out by the court,” Davis said. “This is our opportunity, I believe, to move forward and correct that mistake and to make this exemption for first time home buyers appropriate.”

Last year, the county was tied in litigation with Gary French and Holly Dunbar of Fort Washington dealing with the transfer tax. French and Dunbar’s lawsuit claimed the county overstepped its boundaries by providing first time home buyers an exemption and the county’s circuit court ruled in their favor.

County Attorney Rhonda Weaver said mandatory exemptions are allowed with the bill, but the county could not create a partial exemption according to the circuit court. The first time home buyer exemption was partial, she said.

“It has to be a complete exemption, and the exemption in the original local bill was a partial exemption,” Weaver said.

Weaver said the first time home buyer exemption would need to come under Section 13-409 in the state’s tax article which states the county could provide an exemption for those who have never owned state real property and were never the principle owners in a piece of real property in the state.

“That is a simplified response,” Weaver said. “There were a couple of problems with the language, but the first time home buyer would have come under 13-409.”

Commissioner Bobby Rucci (D) said he remembers the county used to offer first time home buyer exemptions before and would be interested in finding a way to grant the exemption again “the way it was before.”

“We’ve always had a first time homebuyer in Charles County and it changed when we did that resolution before. And we never straightened it out,” Rucci said.

Commissioners’ President Peter Murphy (D) said, at this point, the bill is just being introduced and amendments, in the meantime, can be provided.

“What we’re doing now is just getting this on the calendar so what we would do is bring this piece of legislation back and make amendments to it,” Murphy said. “That’s when we have this conversation.”

County Commissioner Ken Robinson (D) said the legislative process allows for amendments to the bill between now and May 10, when the public hearing is scheduled for the bill.

There is “ample time” between now and then, Robinson said, to do research on the bill and ensure any future amendments meet the standards of the state and county law.

Murphy said if any commissioners come up with amendments, not just for the transfer tax, but for any piece of legislation, it would be best for commissioners to present the amendments to the county staff beforehand.

“That way we’re all ready to have a more robust, and I think, complete discussion,” Murphy said.