A recent PolitFact Oregon story HERE concluded that a Realtor claim that Oregon could double tax real estate transfers unless the Oregon constitution was changed to prohibit such a tax was "half true".
I think that grade is all wet and should instead be "pants on fire".
Realtors supporting the tax are really pushing for a permanent tax exemption for one special kind of transactions, real estate transfers (note this is on ALL kinds of property transfers not just principle residences).
The story appears to accept that a possible future real estate transfer tax would somehow amount to double taxation and does NOT mention the existing exemption on capital gains of up to $500,000 for married couples for principle residences.
That exemption has a biannual cost of $193.8 million according to the most recent Oregon Tax Expenditure Report. While transfers of investment property and second homes are subject to [lower] capital gains rates, the vast majority of sales of principal residences are EXEMPT from ANY Oregon Capital Gains tax. [Know anyone lately with a $500k gain on their home sale?].
The broad Realtor claim of a possible DOUBLE taxation for property transfers [not examined by the PolitFact Oregon analysis] therefore is clearly NOT true and the rating should be switched to "pants on fire".
If real estate deserves an exalted status perhaps the next step for the
Realtors is to cement into the Oregon Constitution the current mortgage
interest deduction and the property tax exemption?
A quick look at the Oregon tax expenditure report shows the Oregon cost of these home ownership tax expenditures.
Mortgage Interest $1.631 Billion
Property Tax $384 Million
In a post HERE I calculated that the biannual cost of all home ownership related tax expenditures in Oregon was $2.248 Billion. Comparisons with prior tax expenditure reports shows that the cost of home ownership tax expenditures was project to increase by $357 million in the 2011-2013 biennium vs the 2009-2011 biennium.
Of course these costs are only STATE costs for real estate tax expenditures, which pale in comparison to the federal tax expenditures for home ownership.
Any fair analysis of the tax treatment of home ownership is that it clearly has received very favored treatment at both the state and federal level for decades, and FAR more public funding, via the tax code, than rental real estate, which relies primarily on direct appropriations.
The tremendous negative economic impact of the burst housing/ home ownership bubble should have given all in the housing industry pause, but apparently not so those who are pushing this Oregon constitutional amendment.
Most housing advocates have pushed for a LOCAL option to decide whether a real estate tax should be imposed. Washington county has had such a tax for many years, and this has clearly NOT had a negative impact on growth or home values.
It's amusing to see the slogans "one size does not fit all" and "local control" thrown around when it's convenient to do so.
How anyone who uses those slogans can then turn around and support a constitutional measure that would impose a permanent statewide ban on the ability of a future legislature to authorize local governments to even consider such a transfer tax is beyond me.
