It seems that with every new election in North Carolina, transfer tax on the sale of real estate becomes a consideration. This is a tax imposed in many states that is collected at the settlement table by the attorney and forwarded on to the taxing authority. When I lived in Pennsylvania, transfer tax on a property was 1 percent from the seller and 1 percent from the buyer. Where the money goes varies. The state, county, city, and in some cases, the schools, participate in the revenue stream.
In North Carolina, real estate transfer tax is a new revenue stream under consideration. This tax is often easy to enact because a) homeowners are not organized to fight it and b) the average taxpayer is not overly concerned, if he or she is not planning to sell a home anytime soon – and therefore considers it someone else’s burden.
The tax itself is unpredictable and not a guaranteed stream of income because it fluctuates greatly. For example, from 2008 to 2011, the tax would have been half of what it was in 2006. And how can you budget from such an unpredictable tax? Continue reading