Preemptive block against real estate tax on Nov. ballot
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Preemptive block against real estate tax on Nov. ballot

Date: October 18, 2010
By: Alysha Love and Sherman Fabes
State Capitol Bureau
Links: Missouri Association of Realtors

JEFFERSON CITY -- Missouri property owners currently don't pay a tax when their land changes hands -- and if amendment three passes, it would stay that way.

The Missouri Association of Realtors is behind the initiative that would ban a real estate transfer tax from coming to Missouri. Voters will decide Nov. 2 if the state constitution should be amended to preemptively block state government from instating the tax.

"In this economy when people are losing their jobs -- many people have suffered a loss in income -- to have an additional tax on a piece of property could certainly affect somebody's ability to own their home and achieve the American dream," said Elizabeth Mendenhall, president of the Missouri Association of Realtors.

Real estate transfer taxes are assessed on property when ownership is transferred between parties, according to the group's website. It applies to any change in ownership, whether the property is passed from a buyer to seller, contractor to developer or family member to their heir. 

The tax can turn expensive very quickly, said Sharon Keating, co-owner of RE/MAX Jefferson City, who supports amendment three.

All eight states surrounding Missouri have a transfer tax. Tennessee's tax is the priciest at 37 cents for every $100 the property sells for -- that's $370 for a $100,000 home.

"Your average home owner who's not a very wealthy person -- most of our homeowners will be low to middle income people -- they're struggling to make their payments and pay their taxes as it is," Keating said.

Missouri is one of 13 states without a transfer tax, Mendenhall said. Although no plans for such a tax have materialized yet in the Missouri legislature, proponents of amendment three want to make sure they never do.

"It's a slippery slope," Keating said. "We just don't want it to get started in Missouri, have it start low and then continue to move up as government needs more money to function."

Leaving the option for the tax open provides another way to generate revenue for the state, but Keating said she believes the tax would do more harm than good for home and property owners.

"It would be a devastating blow to an already weak real estate economy," Keating said.

Rep. Mike Leara, R-St. Louis County, said there is general support for the anti-tax amendment in the Missouri legislature. "There are already transfer fees and title registration and things of that nature," Leara said. "Any additional fee is totally unnecessary."

The Realtors Association continues to advocate for the initiative with their "Vote Yes to Stop Double Taxation" campaign. About $2 million have been given to support the ballot measure.

There is no organized opposition to the amendment, although it nearly didn't make the ballot because the petition's signatures were under contention. In September, the Secretary of State's office dropped its appeal of a judge's ruling that allowed the initiative to go to voters.


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