State wants to Tax Home Buyers 1%!
OK, what could possibly make today's Real Estate market worse for everyone and kill off the Federal Economic Stimulus program? Our very own Connecticut State Legislature. Bill #6397 is one of the bills to make it out of committee. If it goes forward, it will take effect on July 1, 2009!
This Bill requires HOME BUYERS to pay a 1% tax that would go to Towns and Municipalities to fund Open Space purchases, Brownfields and some other restricted uses (see below). This would have a very significant impact by making all Homes much less affordable in Connecticut.
One Percent doesn't sound like much. But when a buyer is having difficulty coming up with a down payment and Closing Costs to qualify for a mortgage, one percent might really be 10 or even 20 percent of the down payment. How many people can buy a home if the cash needed goes up 20%? Do we really need to make it harder to qualify for a mortgage than it already is?
The State Legislature really should have to do an "economic impact study" before voting on bills like this! Do they realize they could be negating the entire Federal Stimulus bill? Do they realize this looks like they want the Fed Government to spend $700 Million of our tax dollars to help the economy except here in Connecticut?
This would hurt all towns by lowering Conveyance tax Revenue - which can be used for any purpose - and replace it with limited income that has a restricted purpose. Or to put it another way - Let's trade some Town Revenue for a lot less money that we can only use in limited areas. Or how does this sound? Let's encourage towns to lay more people off to balance their budgets because we are killing other sources of Revenue that might save some jobs.
When the Fed Government is doing everything it can to restart the Real Estate Engine in this economy - there couldn't be a worse time to make housing in CT less affordable. This bill will truly hurt every homeowner in Connecticut by shrinking the number of possible buyers thereby lowering everyone's property value. What could our State Government do to possibly hurt us more?
Call your State Reps today! Stop Bill 6397 before it stops us!
STATE SENATOR-28TH District
John McKinney (R)
Room 3400
Legislative Office Building
Capitol Avenue
Hartford, CT 06106
Phone: 1-860-240-0441 or 1-800-842-1421
http://www.senatereps.state.ct.us/senainfo/McKinneyf6.htm
email: John.McKinney@po.state.ct.us
STATE REPRESENTATIVES
132nd District
Thomas J. Drew (D)
Legislative Office Building
Rm 4000
Hartford, CT 06106-1591
Phone: 860-240-8585 or 1-800-842-8267
http://www.cga.ct.gov/hdo/HDO132.asp
Email: Thomas.Drew@cga.ct.gov
133rd District
Kim Fawcett (D)
Legislative Office Building
Capitol Avenue
Hartford, CT 06106-1591
Phone: 860-240-8700 or 1-800-842-8267
http://www.cga.ct.gov/hdo/133/
Email: Kim.Fawcett@cga.ct.gov
134th District
Tony Hwang (D)
Legislative Office Building
Capitol Avenue
Hartford, CT 06106
Phone: 800-842-1423 or 860-240-8700
http://reptonyhwang.com/
The Bill as drafted today....
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General Assembly
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Raised Bill No. 6397
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January Session, 2009
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LCO No. 3154
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*03154_______ENV*
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Referred to Committee on Environment
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Introduced by:
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(ENV)
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AN ACT CONCERNING OPEN SPACE PRESERVATION.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective from passage and applicable to conveyances of real property occurring on or after July 1, 2009) (a) A municipality may impose a buyer's tax on the conveyance of real property at the rate of not more than one per cent of the consideration paid by the buyer in excess of one hundred fifty thousand dollars. Such tax may be retained by the municipality, shall be kept in a separate account and shall be used for any of the following purposes approved by the Office of Policy and Management: (1) Purchase of development rights related to or the purchase of open space land, forest land, farm land or waterfront property by the municipality or by the municipality in cooperation with the state or federal government or with a private organization such as a land trust, (2) brownfield remediation, or (3) other environmental projects.
(b) Transfers resulting in the preservation of open space land, forest or farm land shall be exempt from the provisions of subsection (a) of this section.
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This act shall take effect as follows and shall amend the following sections:
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Section 1
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from passage and applicable to conveyances of real property occurring on or after July 1, 2009
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New section
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Statement of Purpose:
To allow municipalities to impose a buyer's tax on certain real property transactions, to be used to purchase or protect open space, forest land, farm land or waterfront property, to remediate brownfields or for other environmental projects.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]
These comments and the call to action were prepared by Mike Tetreau - Realtor and member Board of Finance for the Town of Fairfield.
