By Moses Carey, Jr.
A topic of much discussion in the current 2007 General Assembly session and here in Orange County has been a possible land-transfer tax for all 100 North Carolina counties. But what is a land-transfer tax?
A land-transfer tax is a tax that would be paid when a property owner sells a home, commercial property or vacant land to another party. Six counties in North Carolina â€” Camden, Chowan, Currituck, Dare, Pasquotank and Perquimans â€” already have a land-transfer tax and have experienced no negative effects from it.
It has been said that a land-transfer tax would stifle growth, but that is not true. Four of the counties with a land-transfer tax rank among the 20 fastest-growing counties in the state from July 1, 2000 through July 1, 2006, according to figures recently released by the U.S. Census Bureau. All four experienced growth in that time frame that was significantly above the stateâ€™s growth rate of 10 percent. It is also telling that five of the six counties with a land-transfer tax rank among the top 10 counties in the state in per capita education funding.
Land-transfer taxes provide more resources for counties and relieve pressure on the annual property tax. The presence of this additional revenue source has contributed to the quality of life in those counties by keeping property taxes reasonable and helping provide for the necessary infrastructure to serve a rapidly growing population.
If Orange and the other North Carolina counties had a land-transfer tax, it would provide another revenue stream for counties to ease pressure on rising property taxes so that long-time residents â€” many of whom are retired and living on fixed incomes and who do not plan or want to sell their property â€” can better afford to stay in their houses.
Over the next five years, North Carolina counties are faced with almost $10 billion of public school capital needs and are projected to spend more than $3 billion to help the state pay its Medicaid bills. That is too much of a burden to put on the property tax alone.
According to the Tax Foundation, 36 states already have a statewide or local land-transfer tax in place. If North Carolina counties are not given some additional revenue options to help meet school and other needs, realtors, homebuilders and all of the public will learn that the growth that has been leading to increased home sales â€” and increased profits for realtors and homebuilders â€” will soon be a thing of the past. Realtors and homebuilders surely understand the value of lower property taxes and great schools in maintaining the quality of life for all residents as well as a vibrant business environment.
Orange County and all North Carolina counties need a land-transfer tax.
Moses Carey, Jr. is the Chairman of the Orange County Board of Commissioners.