City of Ashland, Oregon / City Recorder / City Council Information / Packet Archives / Year 2005 / 02/15 / R.E. Taxes
R.E. Taxes
Council
Communication
Resolution in Support of Repealing the Ban on Real Estate Transfer
Taxes
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| Meeting Date: |
February 15, 2005 |
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Primary Staff Contact: |
Brandon Goldman 552-2076 ,
goldmanb@ashland.or.us |
| Department: |
Community Development |
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Secondary Staff Contact: |
John McLaughlin, 552-2043
mclaughj@ashland.or.us |
| Contributing Departments: |
Legal |
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| Approval: |
Gino Grimaldi |
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Statement:
This item is placed on the agenda at the request of the Ashland Housing
Commission. Currently State statute (ORS 306.815) prohibits local jurisdictions
from adopting a local real estate transfer tax (RETT). A draft bill proposes
to repeal this prohibition, giving communities the opportunity to consider
if a real estate transfer tax is an appropriate revenue source. |
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Background:
The City Council considered and approved a resolution on this same subject
at its April 15th, 2003, meeting. The existing City resolution (2003-11)
emphasized the City's right to home rule and urged the state legislature
to not preempt issues of local control. Resolution 2003-11 does urge the
legislature to repeal the prohibition on the establishment of real estate
transfer taxes. The City Council did not commit to whether a local real estate
transfer tax would be adopted or, if adopted, where the funds would be allocated.
In 2003, a Senate Bill was also proposed (SB863) before the State legislature
that aimed to lift the preemption on real estate transfer taxes for a pilot
program which would have allowed the cities of Ashland and Portland to consider
the implementation of a RETT equivalent to 0.5% of the sale price of property
to benefit affordable housing. The bill did not make it out of committee. |
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Related City
Policies:
The Affordable Housing Action Plan identifies, as Strategy 1, the provision
of funding for affordable housing. One of the funding options presented in
this plan is a real estate transfer tax.
Supporting legislation to lift the preemption on a RETT has no direct fiscal
impact. However, assuming the prohibition is lifted, and the City chose to
enact a real estate transfer tax in the future, a 0.5% tax ($5 per $1000
of valuation at sale), where the first $200,000 of a property's value would
be exempted, would generate approximately $420,000 per year in revenue to
address affordable housing. This estimate is based on past real estate
transactions (2004) and are subject to change based on different assumptions
and changes in the real estate market. |
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Council
Options:
The Council may choose to adopt a resolution supporting the repeal of prohibition
on real estate transfer taxes, or may choose to further study the topic,
or take no action. |
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Staff
Recommendation:
The Housing Commission has recommended the Council strongly support the Real
Estate Transfer Tax and investigate engaging in a lobbying effort to support
the lifting of the preemption specifically for the purpose of affordable
housing. |
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Potential
Motions:
Move approval of the proposed resolution supporting the repeal of the prohibition
on real estate transfer taxes. |
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| Attachments:
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