Commissioners leave exemption off transfer tax

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

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.”