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Study: Real Estate Transfer Taxes Lead to Unintended Consequences
Real estate transfer taxes can result in serious unintended consequences in jurisdictions across the U.S. that have approved them, according to a new study by the Sage Policy Group. The taxes may slow home sales, slow commercial development and property sales, and reduce housing construction, while falling billions short of expected revenue.
The report, titled The Economic and Fiscal Consequences of High Transfer Tax Rates and commissioned by the Community Tax Coalition, examines recent transfer tax hikes in major cities, including Los Angeles, San Francisco, Philadelphia and Pittsburgh. In Los Angeles, for example, the Measure ULA transfer tax fell 63% short of the projected $900 million annual revenue.
“The Community Tax Coalition urges local officials, lawmakers, and voters nationwide to carefully examine proposed transfer taxes,” said Jamie Gregory, president, Community Tax Coalition. “These taxes might seem like an easy way to fund public services, but in reality, they worsen housing shortages, harm working families and undermine local budgets.”
Industry associations including BOMA International, the National Apartment Association, ICSC and the National Association of Realtors lauded the study. “What this study makes clear is that high real‑estate transfer taxes are far from the ‘easy revenue’ that some policymakers assume,” said Shannon McGahn, chief advocacy officer and EVP of NAR.
- ◦Financing
- ◦Economy
- ◦Policy/Gov't
