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Introduced by

H.857

Introduced by   Committee on General, Housing and Military Affairs

Date:

Subject:  Property transfer tax; affordable housing; homeless prevention; back rent programs

Statement of purpose:  This bill would adjust the rates assessed on the transfer of property under the property transfer tax and apply any new revenues resulting from the adjustments to affordable housing programs including homeless prevention and back rent programs. 

AN ACT RELATING TO THE PROPERTY TRANSFER TAX, AFFORDABLE HOUSING, HOMELESS PREVENTION, AND BACK RENT PROGRAMS

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  32 V.S.A. § 9602 is amended to read:

§ 9602.  TAX ON TRANSFER OF TITLE TO PROPERTY

A tax is hereby imposed upon the transfer by deed of title to property located in this state.  The amount of the tax equals one and one quarter one half percent of the value of the property transferred, or $1.00, whichever is greater, except as follows:

(1)(A)  with respect to the transfer of property to be used for the principal residence of the transferee the tax shall be imposed:

(i)  at the rate of five-tenths of one percent of the first $100,000.00 in entire value of the property transferred and if the value is not more than $300,000.00;

(ii)  at the rate of one and one quarter percent of the entire value of the property transferred in excess of $100,000.00 if the value is not more than $400,000.00;

(iii)  at the rate of one and one half percent of the entire value of the property transferred if the value is not more than $1,000,000.00; and

(iv)  at the rate of two percent of the entire value of the property transferred if the value is in excess of $1,000,000.00.

(B)  provided that no tax shall be imposed on the first $100,000.00 $300,000.00 in value of the property if the purchaser obtains a purchase money mortgage that the Vermont housing finance agency has committed to make or purchase;

(2)  with respect to the transfer of property which is enrolled at the time of the transfer in a program under chapter 124 of this title, or is otherwise a working farm at the time of the transfer if not so enrolled, the tax shall be imposed in the amount of five-tenths of one percent on the entire value of the property transferred; provided, however that no part of the property is converted to a use which would subject it to the land use change tax or an obligation to repay property tax benefits under chapter 124 of this title for a period of three years following the date of the transfer, or if it is a working farm which is not enrolled under chapter 124, that the property is not taken out of agricultural production for a period of six years following the date of the transfer.  For the purposes of this subdivision, a working farm shall mean a parcel of land actively used by a farmer, as that term is defined under section 3752(7) of this title.  If the conditions of this subdivision are breached by the buyer, the buyer shall be obligated to pay the full transfer tax in the amount of one and one-quarter percent and this obligation shall run with the land.

(3)  with respect to the transfer to a housing cooperative organized under chapter 7 and whose sole purpose is to provide principal residences for all of its members or shareholders, or to an affordable housing cooperative under chapter 14 of Title 11, of property to be used as the principal residence of a member or shareholder, the tax shall be imposed in the amount of five-tenths of one percent of the first $100,000.00 $300,000.00 in value of the residence transferred and at the rate of one and one-quarter percent of the value of the residence transferred in excess of $100,000.00 $300,000.00 provided that the home site leased by the cooperative is used exclusively as the principal residence of a member or shareholder.  If the transferee ceases to be an eligible cooperative at any time during the six years following the date of transfer, the transferee shall then become obligated to pay any reduction in property transfer tax provided under this subdivison subdivision, and the obligation to pay the additional tax shall also run with the land.


Sec. 2.  PROPERTY TRANSFER TAX; EFFECTIVE DATE; DISPOSITION

             OF REVENUES.

(a)  This act shall take effect for transfers of property on and after January 1, 2007.

(b)  Determination of base revenue amount.  The commissioner of taxes shall determine an annual base revenue amount of property tax revenues collected by the tax on transfers of property at the rates in effect prior to January 1, 2007 by determining the average of the amounts collected in each of the calendar years 2004, 2005, and 2006. 

(c)  Distribution of base revenue amount. Beginning January 1, 2007, and each year thereafter, the commissioner of taxes shall distribute the base revenue amount collected in that year in accordance with the following existing provisions of law:

(1)  One percent of the base revenue amount shall be deposited in a special fund for property valuation and review administration under 32 V.S.A. § 9610(c).

(2)  After distribution to the tax department as provided in subdivision (1) of this subsection, of the remaining base revenue amount:

(A)  Fifty percent shall be deposited in the housing and conservation trust fund under 10 V.S.A. § 312;

(B)  Thirty‑three percent shall be deposited in the general fund of the state under 32 V.S.A. § 435(b)(10); and

(C)  Seventeen percent shall be deposited in the municipal and regional planning fund under 24 V.S.A. § 4306(a).

(d)  Determination and distribution of incremental revenue amount.  Beginning January 1, 2007, the commissioner of taxes shall determine the incremental amount of property tax revenues collected in that year by subtracting the base revenue amount from the total amount of taxes collected under the rates in effect in that year.  The resulting incremental revenue amount collected in any year shall be distributed as follows:

(1)  The first $500,000.00 to the department for children and families, of which $250,000.00 shall be expended for homeless prevention programs and $250,000.00 shall be expended for back rent programs of the department;

(2)  Any remaining amount shall be deposited in the housing and conservation trust fund to be used by the housing and conservation trust fund board for the support of housing programs.  The amount of incremental revenue deposited in the fund for housing programs under this subdivision shall be used by the board to supplement and not replace the amounts expended for housing programs in the base year as determined in subsection (b) of this section.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us