Only 13 states are without a tax on real estate sales and transfers. In these troubled economic times two of the remaining states have consumer driven campaigns to keep it that way, Missouri and Montana. An initiative outlawing such fees will appear on ballots in both states later this year. Consumers usually vote against tax issues, especially in times of economic stress.
A coalition, headed by the Montana Association of Realtors is working hard to pass a state constitutional amendment on the Nov. 2 ballot. The initiative would amend the state constitution prohibiting governments at all levels from taxing real estate sales, trades and transfers of any sort.
A similar proposal will be on the Missouri ballot. The National Association of Realtors backed both state Realtor organizations to campaign for the initiatives. The groups lobbied for the same sort of initiative in Arizona, which was passed in 2008. More than three out of four voted for the amendment to disallow any transfer tax in the state’s election.
In Montana, where home values are slipping at some of the slowest rates in the country because their was little subprime and new mortgage products marketed to home buyers a coalition gathered 76,000 voter signatures to surpass the number needed to put the issue on the ballot.
There have been eight attempts to tax property transfers in Montana since 2001 as state law makers shop for ways to gather additional revenue instead of adopting cuts in government services and programs, which numerous studies show the public wants.
Transfer taxes average 0.6% across the country with Delaware and Florida having the two highest rates, including taxes that are usually paid by buyers and sellers of real estate. Both states have total transfer taxes that are near 2% of the property’s sale price with taxes that are divided among county and state taxing entities. Most of the efforts to raise taxes in Montana and Missouri have averaged around 1% meaning a home sold for $100,000 would be taxed $1,000 to transfer title.