Voting ‘no’ on Saturday could mean new real estate taxes

Published 12:00 am Wednesday, November 16, 2011



LAPLACE – In addition to an assortment of local municipal runoff elections throughout Louisiana, Saturday’s political ballot will also include a statewide constitutional amendment that would ban new real estate transfer taxes or fees tacked onto the cost of an exchange of property.

The way the amendment is worded is likely to produce some confusion among voters. A vote in favor of the amendment means there would not be any added taxes on real estate transfers. A vote against the measure eliminates the ban and leaves the opportunity open for municipalities to enforce the taxes in the future.

Amendment 1 would prohibit the state and local governments from adding a tax on the buying or selling of real estate. Outside of Orleans Parish, where a $325 “documentary transaction tax” is imposed, no other region in the state currently imposes the fees, and many in the real estate industry are fighting to keep it that way.

“We are saying ‘no’ to new taxes on new home purchases,” said local Saints Board of Realtors President Eliza Eugene. “Homeowners are already paying property taxes. An additional 3 percent tax on a home purchase could price some new home buyers out of the market.”

Eugene explained that if the state were to impose a 3 percent transfer tax, a home buyer wishing to purchase a $150,000 home would have to pay about $4,500 in taxes in addition to closing costs and other fees.

“We would be double taxing the home buyer,” Eugene said. “It limits home affordability and makes it especially difficult on first-time home buyers.”

As it stands now, Louisiana is one of 13 states that do not tax the transfers. Eugene said putting the measure in place helps the state maintain a competitive advantage over surrounding states that do impose the taxes.

Opponents to the measure, however, say there is no need for the amendment to be voted on now since there has been no push to add a tax in the first place. They also say that, in the future, it could limit the way local governing bodies generate money.

The Louisiana Budget Project, a private organization that analyzes fiscal issues and their impact on low- and moderate-income residents, has expressed opposition to the measure, saying it could “damage the ability of the state and local governments to provide revenue needed to support health care, education and other essential services,” according to a media release.

If the amendment is approved, Louisiana would become the fourth state in the nation to constitutionally ban the real estate tax, following Arizona, Montana and Missouri. The ban would not affect the ability of clerks of court to assess fees to record real estate transactions or realtors, agents and lawyers who charge fees at the closing of a sale.

It would prohibit state and local governments outside of New Orleans from imposing additional taxes.

The Council for a Better Louisiana, another Baton Rouge-based research and advocacy group, has also expressed opposition to the amendment, while supporters have put about $260,000 into a comprehensive media campaign to encourage voters to pass it.