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Proposition 100 Protect Our Homes
Ashley,
Good question! You pay property taxes on your home's value every year. A transfer tax on your home would be a new sales tax in addition to your annual property taxes. That would be a double taxtion on your home.
Income taxes are paid by wage earners. Sales taxes are paid by consumers of products. Propety taxes are paid by those who own property. Transfer taxes tax what has already been taxed by a property tax.
In Arizona, we currently don't have a transfer tax on homes and Prop. 100 if passed keeps it that way. Transfer taxes do raise the costs for both buyers and sellers - you pay more and get less home.
In some states, you don't even have to buy/sell a home to get hit with this double tax. All you have to do is transfer your home, like into a family trust and you get taxed.
One more thing...transfer taxes are charged on the full amount of the home's sales price...including the amount that you borrowed and owe on your mortgage.
Proposition 100 Protect Our Homes
Corinne - Double taxing property owners is simply wrong and we should not wait until politicians succeed in passing bad tax policy before we act. Waiting until the train wreck happens is generally the way laws are made, but this proposition allows current and future homeonwers to avoid double taxation.
Since property owners already pay taxes on their property's value annually, to tax it again just because you moved is unnfair. You can't tax something like homes and make it more affordable. All you do is increase the price all buyers pay for a home - you pay more and get less home. In states that have exempted some amount (which is generally far less than $500K) from the double taxation impact of a real estate transfer tax, they have already admitted that transfer taxes impact housing affordability. Open space is in AZ is generally paid for by bonds which of course are paid for by your annual property tax.
I hope this helps explain what there is to be afraid of - double taxation.
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Proposition 100 Protect Our Homes Not a bad finish for Prop. 100! Thanks to all that helped make Prop. 100 a success.