Thursday, March 03, 2005

New Taxes - Real Estate

DynamoBuzz points out the acting governor's proposed tax increase on real estate transfers.

And they're increasing the real estate transfer tax again, but only on homes between $150,000 and $350,000. I think McGreevey raised the tax last year on home sales over $350,000, so Codey now get to tax the remaining homes.

What this really means is that practically all real estate transfers will now be subject to this additional tax. A quick trip over to the Office of Federal Housing Enterprise Oversight shows that home values in NJ are up 13.67% in the past year, and 74.4% over the last 5 years.

The data available from the 2000 census really show what the governor is up to. Based on the census value, just over a million homes would be subject to the new tax. The groups in blue were afflicted with the new tax last year, while the line in yellow would be included under the new budget proposal.

VALUE (2000)

2000 Census Count

Value (2005)

Less than $50,000


Less than $87,200

$50,000 to $99,999


$87,200 to $174,399

$100,000 to $149,999


$174,400 to $261,599

$150,000 to $199,999


$261,600 to $348,799

$200,000 to $299,999


$348,800 to $523,199

$300,000 to $499,999


$523,200 to $871,999

$500,000 to $999,999


$872,000 to $1,743,998

$1,000,000 or more


$1,744,000 or more

When you increase the home values by 74.4%, you get the right hand column. As you can see, the largest group of homes in the census report (highlighted in orange) has been inflated into the new tax -- another 415,190 homeowners with a nasty surprise waiting for them if for some reason they need or want to sell.

The worst part is the next group, highlighted in red. If you bought a home for $86,000 five years ago, it is now subject to this additional tax. That group includes about 28% of those the census found in the $50k-$100k group, or about 64,000 homes. A little more quick math shows that, while Governor McGreevey piled this tax on about 650,000 homes, acting Governor Codey wants to expand it to over 1.5 million homes.

This additional tax should not be tolerated by the voting homeowners of New Jersey. Instead of finding creative new ways to raise taxes, the government should stop redistributing our confiscated wealth and get back to the business of providing necessary services to all citizens.