My strong opposition to the proposed increase in the deeds excise tax
By Dick Neitz
Ladies and Gentlemen,
While I have already expressed my strong opposition to the proposed increase in the deeds excise tax to Sheila Lyons, Charlotte Striebel and others, I thought it important to take the time to share my perspective and opinion with the other County Commissioners and entire the Assembly of Delegates. Hopefully, this correspondence will also be shared and/or forwarded to the other members of the Assembly.
Any attempt to balance the county's budget on a totally unpredictable income stream is very dangerous.
While I fully understand the county's frustration with lower revenue, my opposition to the increase in the Deeds Excise Tax is based on the following factors:
- The tax paid to record deeds in Barnstable County is already the highest in Massachusetts at a total charge of $5.70 per thousand of sales price. The seller of a typical $300,000 home now pays a total of $1,710 in state & county tax for the privilege of selling a home! The proposed increase attempts to extract another $129 on that $300,000 sale bringing the tax total to $1,839 PLUS more fees to record the deed, the mortgage discharge and other required documents.
- It's extremely difficult to justify an increase in fees when the people paying the tax have already suffered significant loss of equity due to the economic downturn. Many homesellers today are selling for less than what they paid. An increased tax on a devalued asset is a tremendous hardship, exacerbates their misfortune, and increases their loss. I know of a current circumstance where a 77 year old widow is selling her home for less than the mortgage she owes. She's already forced to pay money out of pocket to sell her home, and the county may require her to pay even more!
- Any attempt to balance the county's budget on a totally unpredictable income stream is very dangerous.
- The real estate market on Cape Cod has experienced a catastrophic decline of historic proportion. Real estate agents, brokers, support staff, builders, tradesmen, attorneys, advertising outlets, furniture stores, paint stores, moving companies, restaurants, and dozens of other small businesses on Cape Cod are already reeling from the slowdown. ANY increase in tax will have a detrimental effect on the real estate market and the economy of our region... particularly when at the same time local and state governments are also increasing the cost of doing business by adding more fees, gas taxes, rooms taxes and meals taxes. Many businesses will just not survive to pay the higher taxes. More jobs will be lost. Fewer homes will find buyers, and the county's revenue will decline further.
- History tells us that deeds excise tax is already a burden on a very small proportion of the population. Why should only the relatively small number of people who choose to sell their home in a given year be the only citizens saddled with paying an increased tax that benefits the operation of the entire county. A broader based tax on a greater number of payers would be much more fair. That's exactly why the first Land Bank Tax was defeated by the voters and the eventual (and broader based) surcharge on real estate tax bills was enacted. Unfair taxes are not popular with voters.
Finally, as a founding member and past chairman of the Cape Cod Economic Development Council and an active participant in regional issues and economic development for more than 25 years, please allow me to remind you that this tax increase would negatively impact many residents of Barnstable County as well as a major component of our regional economy already struggling to survive.
Increasing the transfer tax during a time of fewer transfers is, in my opinion, a major mistake!
In closing, may I thank you for your service to our regional government, and for your consideration of my view on this vital matter.
Richard W. Neitz, CRB, CRS
NEITZ Real Estate
"Serving Cape Cod Since 1971"
34 North Main St., South Yarmouth, MA 02664 ~ 508-394-3000