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Evelyn Bruder, Associate Broker, CRS,GRI,ABR
Steinborn & Associates
Real Estate 575-522-3698
Evelyn Bruder


Phone
(575) 650-7224
Fax
(575) 522-4987

Steinborn & Associates Real Estate

141 N. Roadrunner Pkwy. Suite 141
Las Cruces, NM 88011
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HOMES IN LAS CRUCES, NEW MEXICO

NEWS AND VIEWS

WHAT'S NEW IN REAL ESTATE IN LAS CRUCES

A REAL ESTATE TRANSFER TAX PROPOSAL

As you probably know, Governor Richardson's Blue Ribbon Tax Commission has recommended a number of tax increases. Among these is a "Transfer Tax" on the sale of real estate. This tax will only exclude new construction. It will apply to all re-sales of residential and commercial real estate. The State will not care whether the buyer or the seller pays it, but the bottom line is the cost of all real estate prices will rise. This is not good for EITHER the buyer or the seller or the ecconomy in general.

Just as a point of information there are a number of States that have a "Transfer Tax," BUT only Hawaii has BOTH a Transfer Tax PLUS a Gross Receipts Tax.

Governor Richardson has called a special session of the Legislature to begin Monday, October 27,2003 to consider taxes.

The currently proposed tax structure is:
No tax on the first $100,000 of sales value.
* 1% tax on the next $200,000($100K to $300K)
* 1.5% on the next $200,000 ($300K to $500K)
* 2.0% on the anything above $500,000.

Examples of the cost of this tax would be:
On a $150,000 sale the tax would be (.01)*$50,000 or $500
On a $250,000 sale the tax would be (.01)*$150,000 or $1,500
On a $350,000 sale the tax would be (.01*$200,000]+ .015*$50,000] or $2,750.
On a $550,000 sale the tax would be (.01*$200,000]+[.015*$200,000]+[.02*$50,000] or $6,000

During the Blue Ribbon Committee deliberations on the Transfer Tax the following legislators on the commission voted against the transfer tax:

Representatives Janice Arnold-Jones, Irvin Harrison and Tom Taylor; and Senators Carroll Leavell, Leonard Lee Rawson, and John Arthur Smith.

Voting in favor of a transfer tax were: Senators Manny Aragon and Cisco McSorley, and Representatives Ben Lujan and Don Whitaker.


As you know, once a tax gets passed, it never goes away and only gets increased over time.

This tax will have far reaching effects on every home owner and any potential home buyers. Home sales have been the only support to the economy over the past two years, and this tax will certainly undermine that support. It will effect the entire economy.What is the effect? Consider this:

In the first year after buying a home the buyer will spend an average of $8,600 for appliances, furniture, and property alterations. One lesson to be learned here is how important home purchasing is in the big scheme of things with our ever-scrutinized economy. The construction of 1,000 single-family homes generates just under $80 million in wages and $42.5 million in tax revenues and fees. Homebuyer spending reverberates for years following a home purchase to benefit local economies. From landscaping and contracting businesses to appliance and furnishing retailers, flatware and kitchen doodads ' you can trace it right down to the sale of light bulbs and liken it to a gigantic ripple effect of one stone being dropped in the middle of a lake.

If, the possibility of this tax bothers you, I would encourage you to contact the Governors office at 505-476-2200 to let him know you DO NOT WANT the transfer tax. You may also contact the Blue Ribbon Tax Commission staff members James O'Neill at oneill@prodigy.net and Janice McCrary at Janice.McCrary@state.nm.us.

NOW is the time to speak out - before it is too late!


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