Bill > A200

Introduced Session

This bill eliminates one of the four realty transfer fees, the supplemental fee. In addition, it repeals the one percent assessment on the selling price of commercial property transacted for more than $1 million, and the parallel tax on the sale of controlling interests in certain commercial real property. In so doing, the bill lowers the cost of property transactions and supports the real estate market. The State capitalized on the recent real estate boom by creating two new realty transfer fee layers in 2003 and 2004 and by instituting a one percent assessment on residential properties selling for more than $1 million in 2004 and on commercial properties selling for more than $1 million in 2006. Now that the real estate market finds itself in a downward spiral, these actions drag down the market and dissuade property transactions. The bill repeals the supplemental fee, which saves a seller of an existing $250,000 property $300, the seller of a new $250,000 property $600, and a seller of an existing $350,000 property $580. The supplemental fee, created in 2003, applies to the seller of non-exempt real property, provided that the seller is neither a senior citizen nor blind or disabled. The supplemental fee is a graduated fee that pertains to the full amount of the property transaction and has the following structure: $0.25 on each $500 of consideration on the first $150,000 of the value recited in the deed of transfer; $0.85 on each $500 of consideration between $150,000 and $200,000; and $1.40 on each $500 of consideration over $200,000. Of the revenue generated, counties retain $0.25 on every $500 of consideration, of which a portion shall be utilized under certain circumstances to finance public health services under the Public Health Priority Funding Act. The remaining revenue accrues to the State Extraordinary Aid Account to fund property tax relief. In addition, the supplemental fee effectively voided a partial exemption of $1.00 per $500 of consideration for the first $150,000 of the transaction price of property upon which there is new construction. The bill also repeals the "one percent fee" that buyers of Class 4A "commercial properties" transacted for more than $1 million pay and the parallel tax on the purchaser in a non-deed transfer of a controlling interest in an entity that owns Class 4A "commercial properties". The buyer of a $2 million commercial property thus saves $20,000. Class 4A "commercial properties" are any kind of income-producing real property other than property classified as vacant land, residential property, farm property, industrial properties, and apartments.

AI Summary

Committee Categories

Dawn Fantasia (R)*,  Michael Inganamort (R)*, 

Introduced, Referred to Assembly Community Development and Women's Affairs Committee (on 01/09/2024)

Official Document