Learn More About The Issues

What is a Real Estate Transfer Tax?

A real estate transfer tax is a state or local government imposed tax that is collected when you transfer ownership of your home, land or commercial real estate. Typically, once the tax is initiated, the rate can be increased by the state, county or city at any time.

What is the language of the constitutional amendment being considered?

Amends Constitution: Prohibits real estate transfer taxes, fees, other assessments, except those operative on December 31, 2009.

Result of “Yes” Vote: “Yes” vote prohibits state/local governments from imposing taxes, fees, assessments on transfer of any interest in real property, except those operative December 31, 2009.

Result of “No” Vote: “No” vote retains existing law, prohibiting local governments from imposing real estate transfer taxes/fees (with exceptions), allowing state legislature to impose such taxes/fees.

Summary: Amends constitution. Current statutory law prohibits a city, county, district, or other political subdivision/municipal corporation of this state from imposing taxes or fees on the transfer of real estate (with certain exceptions). However, the state legislature has the authority, subject to governor approval, to impose such taxes and fees or to change current statutory law. Measure prohibits the state and any city, county, district, or other political subdivision or municipal corporation from imposing taxes, fees, or other assessments based upon the transfer of any interest in real property or measured by the consideration paid or received upon the transfer of any interest in real property. Measure exempts from the prohibition any taxes, fees, or other assessments in effect and operative on December 31, 2009. Other provisions.

Why do we need this measure?

State and local governments in Oregon are feeling tremendous financial pressures, mostly because of the difficult economy. Local officials would welcome any source of new revenue to keep their operations going. A new revenue stream from a tax on property sales would be very tempting, even though it represents a double tax on property and another burden on an already stressed housing market. We need a law to take this law off the table. Forever. 

What is a real estate transfer tax?

A real estate transfer tax is imposed by a state, county, or city when ownership of property is transferred from one party to another. It is like a sales tax on your home or other property. Real estate transfer taxes are usually one-time fees paid at the time of closing and are typically a percentage of the selling price of the property.

How would a real estate transfer tax work? 

Each level of government that imposes a tax would charge a percentage of the sales price (rates typically vary from .1% to 4%) when a home or real property is sold, thus there could be multiple layers of taxation on a single transaction. For example, if you sold a $200,000 home and the county transfer tax was at 1%, and the city transfer tax was .5%, then would pay $3,000 at the time of closing. The tax is imposed whether or not a profit is made on the sale or transfer and applies to all real property including agricultural, commercial and residential property.

What is the current threat to property owners? 

Current law does not allow local governments to impose a transfer tax. But legislative proposals to repeal this law have been introduced in each of the last five sessions of the Oregon legislature.  The pressure on lawmakers to help local governments continues to build.

Does Oregon currently have a real estate transfer tax?

No, the state of Oregon does not currently impose a real estate transfer tax.

Washington County, in the Portland metropolitan area, is the only local government with a transfer tax.  It’s a .1% tax on the sale of real property.  This tax would be “grandfathered in” with the passage of the ballot measure and it would be allowed to continue.

Why is it necessary to amend the State Constitution? 

A constitutional amendment is the only way to truly protect Oregon homeowners from a real estate transfer tax. The constitution is dedicated to protections for citizens, protections of speech and protections of religious expression. Amending the constitution is the most effective way to protect the people of Oregon from double taxation on real estate. The only way to amend the constitution is through a vote of the people.

Does this measure take away any existing revenue from state or local government? 

No, this proactive measure does not negatively affect current school funding, local government funding or state revenues in any way. Instead, it prohibits the state and local governments from targeting property owners with a new tax.

Why is this measure necessary if we don’t have a transfer tax currently?

After the 2009 legislature passed the largest tax increase in history, we can’t afford to be reactive. During the past five legislative sessions, there have been nine attempts to authorize such a tax at the state or local level. The best defense is a strong offense.

Wouldn’t a real estate transfer tax just be included into the cost of a mortgage and not impose a heavy burden on the buyer?

Any agent will tell you that the difference between qualifying for a loan – or not qualifying – may be a few thousand dollars.  The additional amount needed to pay a transfer tax could put a new home out of reach to a buyer. In the current economy, many families are forced to sell their homes because of a job loss or pay cut. With home values declining, many are selling at a loss. It seems unfair to impose additional taxes on people already facing financial hardship.

What exactly will the ballot measure ask voters to do?

Voters will be asked whether to amend the constitution to “prohibit state and local governments from imposing taxes, fees, assessments on real estate.”  If voters agree, they would vote “yes.”