Last week I wrote a post about Minnesota’s transfer tax on the deed anytime a property sells. On Luxury Homes, this can be quite expensive. Well, if the Senate Finance Committee votes the wrong way, it could become more expensive for every home owner. This Wednesday, April 25th, the committee will be voting on Senate File 442 to increase the state deed tax by 50%. That’s right, 50%!

The Minnesota Association of Realtors is asking for your help. Send a letter to your state senator saying:

“Please vote NO or ask members of the Senate Finance Committee to vote NO on Senate File 442, “The Housing Solutions Act”.With the real estate market going through significant difficulties it is not an appropriate time for legislators to increase the price of housing.Below are a few concerns we have with the 50% tax increase”:

• A Deed Tax increase adds significant burden to those facing foreclosure or short sales. People close to foreclosure will now be further in debt because of this “housing solution.” This bill raises the cost of selling for families facing foreclosure, adds significant tax burden to rental property when sold increasing rents, and ultimately makes all housing less affordable – what kind of solution is that?
• Deed Tax makes housing less affordable. By increasing the state deed tax, sellers will need to adjust their sales price up or receive less equity at closing. Increasing a tax on housing only raises the price of housing to everyone.
• Deed Tax is Regressive. Federal Government abandoned this type of tax in 1976 because it was felt that the tax was discriminatory and inequitable.
• Minnesota has the nation’s highest home ownership rates. More Residents of Minnesota own homes than in any other state. Government should focus its attention on prioritizing current revenues already being generated by the economy and not burden property owners and businesses with more hidden, regressive taxes.

I feel any “Housing Solutions Act” that raises taxes on homeowners is only solving the governments failure at spending money wisely, buy squeezing residents pocket books even more. Instead they should find ways of cutting the fat and frivolous spending too common in the state government. Hopefully this bill is defeated, or else the state Senate might see a lynch mob on its doorsteps.