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Letter: 'No' to more sales tax

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Governor Mark Dayton is proposing a change in the sales tax which would reduce the state sales tax rate, but broaden the reach of sales tax to many other goods and services. I feel that the reduction of the base rate is simply an attempt at making this idea more popular with consumers who might not realize the large impact this change will actually have.

Most people are unaware of the fact that there is a proposal to tax real estate transactions in this new proposal. Now please understand, being a professional Realtor, I hear all the time that Realtors make too much money, so most people think this tax is good. What you may not understand is that it is not taxing the commissions paid to us directly. This change will add a sales tax to the commission you pay at the closing table. It will also add a tax to your mortgage services, your title and closing services, inspections like home, septic and well inspections, surveys, legal opinions and appraisals.

This will add hundreds and possibly thousands of dollars to the real estate transaction, and the Realtor will not be paying the sales tax -- the consumer will be! We already pay income tax on the commissions earned as income.

In a fragile real estate market, this is absolutely the wrong move if we want to continue any kind of recovery. This will add to the fees sellers will pay to sell their homes, and will also add to the fees buyers will pay. Think about selling your lake home where the value could easily be well over $250,000 to $1 million in our market. A sales tax on these services that had previously been tax exempt will now cost you thousands of dollars more -- for the same result! The first time home buyer, who is struggling to come up with sufficient down payment and cash for other expenses at closing time, will now be put under further pressure, and will possibly not be able to buy a home due to the added expense.

Younger people will be affected at a greater level, since they tend to move more frequently for work and family concerns. Is it fair to saddle them with the added expense? People selling a home for retirement or to move into a nursing home and such usually lack extra funds. This will severely impact many Minnesotans.

Real estate transactions are already subject to state taxes as a result of the mortgage registry tax and deed taxes. How many times should the government collect on a property sale or transfer? Property owners already pay income tax and taxes on many other goods and services.

Please contact your legislators and let them know that we do not want to harm the real estate recovery by passing this tax bill. Any recovery will be quickly dampened, and if you are planning to buy or sell in the next year or two, you will be affected!

So No to more taxes! -- Steve Larson, Broker, owner Coldwell Banker At The Lakes

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