KINGSTON, NY – For the second time since the coronavirus pandemic struck, Ulster County lawmakers will consider instituting a new tax for homeowners who sell their property.
Ulster County Legislature Speaker David Donaldson has proposed a local law that would impose a 0.1% tax payable by the seller at the time the property is sold. Lawmakers Laura Petit, D-Esopus and John Parete, a registered Democrat from Boiceville who ran as a Republican, are co-sponsoring the bill.
Under the proposal, the county would levy a tax of $ 0.50 per $ 500, or 0.1%, on all sales of properties in the county. This means that the tax on a sale of $ 500,000 would be $ 500, while the tax on a sale of $ 750,000 would be $ 750. Land transfer tax income would flow to the county, unlike mortgage tax, which is paid by the buyer at the time of purchase and goes to the municipality in which the property is located.
Donaldson said that, based on home sales in 2020, the county could generate around $ 1.1 million by implementing the 0.1% transfer tax.
“We’re going to need the income, whatever way you look at it,” Donaldson said. He said the implementation of the transfer tax, which he said would reduce the seller’s profit “just a little bit”, would have less impact than an increase in the property tax.
Last year Donaldson and lawmaker Lynn Archer proposed a 0.2% tax on all real estate sales over $ 500,000. This plan was withdrawn by the developer amid opposition from other county lawmakers.
Donaldson has said he would like the money generated from the tax to go to fund the housing issues plaguing the county. A recent housing study found that a third of landlords and half of renters in the county live in housing that is unaffordable for them, and a significant portion of county residents spend more than 50% of their income on housing.
“I want the money to be spent on housing issues, whether it’s a fund to help people pay rent or funds to encourage developers to build homes or someone from the planning department to help cities. to enforce their zoning laws, ”Donaldson said. “My mindset is to allocate it to housing, which might help reduce housing costs. “
Donaldson said the most recent proposal will likely face a “uphill road,” both from other county lawmakers as well as the state legislature, which must give the county permission to put implement the new tax.
Minority Leader Ken Ronk said GOP lawmakers oppose the previous proposal and expect them to oppose it as well.
“We already tax people when they buy a house. We don’t need to tax Grandma and Grandpa when they move too, ”said Ronk, R-Wallkill. “For a lot of these people, it’s their retirement. That’s what they’ve built their whole lives for, and now we’re going to take ours in mind.
Ronk also criticized Democrats for what he said was the “easy way” to put in new taxes rather than working to cut spending.
“I believe it was Ben Franklin who said that there were only two things in this world that could be guaranteed, death and taxes. Well, the Democrats in the Ulster County caucus want to prove him right about one of them, ”he said. “I would rather the president and others work with us to try to find savings wherever we can rather than instituting a new tax.”
Donaldson said he expects lawmakers to start debating the resolution asking the state for permission to impose the new tax in March.