NCACC
P.O. Box 1488
Raleigh, NC 27602-1488
Tel: (919) 715-2893
Fax: (919) 733-1065
E-mail: ncacc@ncacc.org

Evidence shows land transfer tax does not negatively impact growth, housing or economic development

Also see:

  • Land transfer tax policy brief (PDF)

    • Despite claims to the contrary from the North Carolina Association of Realtors, the land transfer tax has not negatively impacted growth, the cost of housing or economic development in the six counties in North Carolina that have the tax. Camden, Chowan, Currituck, Dare, Pasquotank and Perquimans have had a 1 percent land transfer tax in place since the 1980s. Research by the NCACC found:

    • Camden, Currituck, Pasquotank and Dare were among the 20 fastest growing counties in the state from July 1, 2000, through July 1, 2006, according to figures recently released by the U.S. Census Bureau.
    • In 2006-07, Dare (1st), Perquimans (2nd), Camden (7th) and Currituck (8th) ranked among the top eight counties in the state in public school capital expenditures per pupil.
    • Since 1991, the statewide trend in property taxes has been upward; however, for these counties the property tax has demonstrated a slight downward trend, suggesting that the presence of the land transfer tax benefits all citizens in the form of less pressure on property taxes, the true “home tax.”

    Quotes from managers in counties with the land transfer tax:

    Camden County Manager Randell Woodruff: “It has greatly benefited Camden County over the years. It has really served to keep Camden financially afloat, being a small, low-wealth county with very little commercial development here to generate new property tax base. It has tremendously assisted the county in the few capital projects we have done over the years.”

    Dare County Manager Terry Wheeler: “In the 20 years we have had it, it has been the greatest tool we’ve had outside of the property tax. Over the last five years, we have built $140 million in new schools, a $16 million courthouse and a $14 administration building, all through the land transfer tax. It has really been great for us.”

    Pasquotank County Manager Randy Keaton: “It has enabled us to fund our school construction needs without having to raise taxes. It has helped us avoid a lot of property tax increases over the years, and it has not affected development. In fact, we’ve had too much development over the last couple of years. All the counties with the land transfer tax, none of them have suffered from a lack of growth. The land transfer tax has helped us pay for things that would otherwise been paid for by property tax increases.”

    The N.C. Association of Realtors on May 9 released its own study of the impact of the land transfer tax on these counties. The NCAR report focuses exclusively on 2006 housing data and only on Currituck and Dare counties, which have experienced phenomenal increases in housing costs in recent years totally unrelated to the imposition of the land transfer tax more than 20 years ago.

    The information reported in the NCACC policy brief examined the housing data from the time the land transfer taxes were implemented in the various counties through data collected in Census 2000. In reality, this data reflects a truer picture of a housing market unaffected by the recent housing boon that has inflated home prices in many of our state’s destination hotspots. The fact remains that according to the U.S. Census Bureau, for the first 10-15 years following the implementation of the transfer tax, housing remained affordable in each of the six counties with the tax.

    Counties across North Carolina are reeling from high Medicaid costs and increasing public school capital needs due to the state’s rapidly growing population. As a result, counties are turning their attention to additional revenue sources to help them keep up with these demands.

    H1982, “Local Option Land Transfer Tax,” was filed May 8 by Rep. Jennifer Weiss (Wake) and would grant all counties the authority for a land transfer tax of up to 1 percent, provided that the public approves the tax in a referendum. The proceeds of the tax would be shared with municipalities on a per capita basis and would have to be spent for public infrastructure purposes.