Chatham County, NC Blogs

Our Legislature authorized (7) seven counties-Dare, Currituck, Chowan, Camden, Pasquotank, Perquimans and Washington the authority, with voter approval, to implement the 1% Land Transfer Tax. All were successful except Washington County. Their referendum has been defeated two times.

I sent the following request to the Managers of the six counties who have implemented the 1% Land Transfer Tax…

“ Will you please provide a short “statement of effect” as to how the 1% L.T.T. is benefiting your county as a revenue source for capital improvements and the status of your local real estate industry.”

Perquimans County

” We rely heavily on our Land Transfer funds for our school projects. Our county ranks 95th out of 100 in sales tax receipts, and part of those funds as you may know are earmarked for school capital funding. The Land Transfer Tax makes up for that and also for ADM funds that may be withheld from the counties. We are able to make necessary capital improvements that would otherwise have to come from increased property tax or financed over a period of time.We’ve averaged almost 30% annual growth the last 4 years. We are issuing about double the amount of dwelling permits now than we were just a few years ago. Due to our proximity to the Tidewater, Va. metropolitan area and the amount of waterfront property, we are seeing more residential development activity than Perquimans County has ever experienced. Land Transfer revenues has been and will continue to be integral to our school capital improvements.” Bobby Darden, Perquimans County Manager

Currituck County

“In a word: Schools. Currituck County is recognized as the 17th fastest growing county in the Country and like most other communities, this growth challenges our ability to provide public education. If not for the Land Transfer Tax, we would fall further behind in our school capital needs and would have had to raise our property tax. We have been able to build a middle school and renovate two elementary schools without incurring any debt thanks in large part by a good working relationship between our Commissioner’s and the Board of Education, good planning and effective budgeting of the Land Transfer Tax. As an aside, we have just completed our revaluation and our County tripled in valuation so I am hard pressed to see where the Transfer Tax has had any negative impacts on the building practices here.”Dan Scanlon, Currituck County Manager

Pasquotank County

“We are one of the fortunate counties that have the land transfer tax. I will be glad to provide any information about the success of the tax in our county if you need it. It has worked very well here and it has not hurt the real estate industry at all.In fact, our land transfer tax receipts have increased by 50% per year for the last two years. All of the counties in the Northeast that have the land transfer tax are having problems with too much growth instead of the reverse.”
Randy Keaton, Pasquotank County Manager

Dare County

“Dare County enacted the tax in 1986. That first year we collected $1.2M. We are now collecting that amount every month. This past year (2004) we collected $12.5M. Building permits are a good barometer of whether or not the industry (Realtors, Home Builders) are affected by the implementation of the Land Transfer Tax. In 1995 we issued 1,713 building permits valued at $96M. In 2004 we issued 3,464 building permits valued at $295M. That’s $24M per month.There is no statistical data anywhere in Dare County that the land transfer tax has hurt the industry (Realtors, Home Builders) in Dare County.”
Terry Wheeler, Dare County Manager
Note: In 2005 Dare collected 15 million and has lowered it’s L.T.T. to 0.5 %
and lowered property taxes to $0.25, the lowest in NC.

Chowan County

“Chowan County was the second county in the state to adopt the transfer tax. The monies are dedicated for capital outlay purposes. Transfers within the Town of Edenton are divided 50%-50%. I believe all the real estate agents in the County will confirm that the transfer tax has not impacted real estate sales in a negative manner but in fact has facilitated sales through improved infrastructure, schools, etc.”Cliff Copeland, Chowan County Manager

Camden County

“The land transfer tax has been a tremendous resource for Camden County. Currently the tax is generating in excess of $500,000 per year that the county uses for capital needs. This is a major revenue producer considering this county’s budget is less than $10 million. Even with the subdivision moratorium in place for the past 18 months the amount collected has been increasing. We are using a portion of it to cover debt service payments on land the county purchased. If it were not for the land transfer tax Camden would be in a severely financially strapped position. We use these funds for all sorts of capital needs that otherwise we would not have the ability to provide.”

Randall Woodruff, Camden County Manager

We do not have legislative authority to implement a Land Transfer Tax. The BOC is seeking this authority from our General Assembly, just like we did in their ‘05-’06 sessions. We have far more support this time as many counties are facing the same residential onslaught that we are experiencing.

We must have a new source of revenue and the LTT is the only revenue option (tax) that will fit Chatham County needs other than a substantial Personal Property Tax increase which many citizens simply can not afford, or an Adequate Public Facilities Ordinace which would put the total burden on our builders/developers-buyers.

We’re trying to do this fairly, but I believe we are going to have to do one of them.

In case you don’t have a clear understanding of exactly which land transfers would be affected or how the revenues can be utilized, here it is.

1% Land Transfer Tax Application
The General Assembly authorizes seven Northeastern counties to use the 1% Land Transfer Tax. This is a summation of what transfers apply and what transfers do not apply.

The tax would apply to:

• All REAL property sales (regardless of profit or loss).
• Exchange of property (whether exchange is for money, real estate, personal property or any other consideration).

• Deeds from non-profit or religious organizations.
• Leases (or a memorandum of lease) that are for a term of more than 10 years or have an option to renew the lease beyond 10 years.

• Leases (or a memorandum of lease) that are for substantially the same property and parties of a previous lease(s), and when the term of the new lease added to the term of the old lease(s) exceeds 10 years.

• Timber Deeds.

The tax would not apply to:

• Deeds of gift.
• Foreclosure deeds or deeds in lieu of foreclosure to the mortgage holder.
• Deeds from Local, State, or Federal Government.
• Certain leases with a term of less than 10 years (see above).
• Transfer in which no consideration is paid or due (consideration is an inducement, something of value given in return for a performance or a promise of performance by another).
• Transfers by operation of law, by will, by intestacy, merger or consolidation.

This tax revenue is restricted to capital expenditures such as sewage systems, solid waste disposal, beach replacement, schools, county-operated buildings and related equipment as well as retiring debt incurred for these purposes.

• Parkers Springs Subdivision – Sketch Design, 50 lots on 87 acres located off SR 1700, MT. Gilead Church Rd., New Hope and Williams   townships was approved with an Environmental Assessment and Peer Review prior to Preliminary Plat. 4-1, Commissioner Barnes opposing.

• Lystra Road Subdivision – Sketch Design, 90 lots on 144 acres – located off SR 1721, Lystra Road, Williams Townships, was disapproved. 5-0.

• Moratorium Ordinance Revision – an amendment to section 7,  Exemptions of Ordinance, to remove Sketch Design from the list of exemptions under Moratorium. 4-1, Commissioner Cross opposing.

• Harnett Water Contract – Mr. Fred Hobbs of Hobbs-Upchurch  Engineers presented an update on our Harnett Water Contract.  We will hold a public information forum January 29 at 6 PM in the   Superior Courtroom for those who are interested in having some input  or simply learning more about the project.

• BOE and BOC – There will be a joint meeting of the BOE and the BOC on February 12 at 6:30 in the PBO Elementary School.   The Lystra Road school property will be discussed.