Taxing time for NJ home sales

From the Herald News:

Bill lets towns tax sale of homes

As the housing market goes ice cold, local homeowners finding few bites on their “For Sale” signs could face a new obstacle — hundreds of dollars in additional taxes charged for selling their homes.

A proposal under consideration by the Legislature would allow municipalities to tax property sales by as much as 0.1 percent. That boils down to $462.50 on a property valued at $462,500, the average sale price in North Jersey in 2007, according to the National Association of Realtors.

Proponents say the small hit for homeowners would generate thousands of dollars in revenue for cash-strapped local governments. Municipalities raise most of their revenue through property taxes, and this year, the state placed new caps on how much towns can raise their taxes.
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For real estate agents and sellers, the proposal comes at the worst possible time, just as buyers have vanished. The New Jersey Association of Realtors has waged a high-profile campaign against the measure, running radio ads and collecting 15,000 signatures from residents in opposition, according to a spokesman.

Lawmakers representing Jersey City, one of the state’s hottest housing markets, wrote the bill last year. It has yet to move from committee, but critics fear that lawmakers could pass the bill during the lame-duck legislative session beginning this week.
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As it now stands, sellers of a $462,500 home pay $3,815 in the state realty transfer tax. These fees are often passed on to buyers, real estate agents say.

Under the proposed legislation, local governments could also tax real estate sales. If the state passes the bill, interested municipalities would have to petition to adopt the tax by putting it up for a local vote.