NM Senate Bill 1056: MUNICIPALITY TAX ON PROPERTY TRANSFERS

This bill would prohibit municipalities from taxing real property sales. Currently, excise taxes on the transfer of real property from one owner to another are not included in prohibited items and so can be levied by local municipalities. There has been discussion in both Santa Fe and Las Cruces regarding imposing transfer taxes. I know that in Santa Fe the discussion was something similar to adding a 1% tax on any homes sold over one million dollars and the purpose of the tax would be for affordable housing.

First, let me say I am all for affordable housing however I have serious doubts the money accrued would be used for that purpose when the town of Santa Fe is having fiscal issues. My second reason for opposing any kind of “transfer tax” is that I have a, maybe unfounded, maybe not…fear of allowing any further taxation of the sale of real estate. Yes, maybe at first it would be one percent on a million dollar sale, but once enacted what would stop the municipalities, counties or other from lowering the sale amount to a $125,000 residential sale. Maybe they would also raise the percentage amount. I found a graph on line that lists every state and the amount of taxes on the sale of a property. Very interesting reading: http://www.ncsl.org/programs/fiscal/realxfertax.htm

Also, please note that in New Mexico all real estate commissions are taxed as “gross receipt taxes”. So, that would be one tax, the seller might pay capital gains taxes depending on the circumstances and everyone pays property taxes. Seems to me like a lot of taxation on a real estate transaction already.

I know that the state association (REALTOR Association of New Mexico) is working hard this afternoon to get a PR campaign going. They are doing print ads, radio ads as well as a website to get the information out to the membership, state legislators and the public. I keep checking about every half hour to see if they have the website live yet? So far, no luck! I was able to get a preview of one of the print ads:

STOP THE HOME TAX NOW! Call your state legislators TODAY at 505-986-4300. Tell them to support Senate Bill 1056. If enacted in Farmington newlyweds Bob and Andrea Martin will pay $1,720. In Santa Fe Mr. George Thomas will pay $3,750. In Albuquerque first time home buyers the Montanos will pay $1,995. In Roswell the Garcia family will pay $990. In Silver City the Sandovals will pay $1,550. In Las Cruces the retired couple of Betty and Joe Smith will pay $1,875. Some Cities in New Mexico are trying to institute a home tax on the sales value of your home that will be added into already expensive closing costs. SB1056 would make it illegal for a city or local government to impose a home tax. This proposed law will protect and defend the value of your private property and prohibit additional home taxes. Stop the home tax New Mexico! Paid for by the REALTORS ® Association of New Mexico, the voice for Real Estate in New Mexico.

Visit stopthehometaxnow.com for more information.