Specifically, do higher deed transfer taxes figure into buyers’ considerations when deciding where to locate and buy a house? We think they do. They would to us.
We always thought it unwise for Wolfville to charge this tax. We have enough disincentives as it is without adding another. We certainly didn’t think it wise to charge the maximum, even when times were good and buyers felt flush. Note too that the amount must be paid in cash on closing and cannot be added to the mortgage amount. Even in good times newcomers complained. It left a bad taste in their mouths. It is a variation on the snow bird tax in Florida which put a heavy tax burden on newcomers to “protect” long term residents (and resulted in decreased resident’ involvement in local government budgets which, without oversight, got fatter and fatter.)
The deed transfer tax issue was mentioned at a recent meeting. Our mayor said that many other municipalities charge this tax and then stated, with as much assurance as he could muster, that this tax was NOT a disincentive to buyers. No matter that one of our real estate agents had written to say otherwise. Mayor Stead not only called into question the accuracy of this previous councillor’s figures, he maligned his motives.
An article in the Advertiser yesterday [Friday, Ap. 24 no link online] tells us that Truro and Cochester County Council is considering raising the deed transfer tax rate from .5% to 1%. Real estate agents there are trying to warn the municipality of the impact this has since some other municipalities don’t have it or charge a lower rate.
Truro and Colchester are considering raising this tax for development projects. We would tell them to beware of a dependence on this tax. But at least they can consider this increase now because they didn’t charge the highest rate to begin with. Wolfville isn’t even in this enviable position. Times are lean, residents are not at all keen on higher property taxes when they have seen other equities hit, the town’s revenues are off and we have no where to go. We can’t charge a bit more to top up the coffers can we? We are already charging the maximum.
Our best bet is to drop the tax to make us competitive with other municipalities which either don’t charge it at all or who charge less. Since house sales are down anyway we won’t be foregoing that much.