Increase in Conveyance Tax

Real Estate Tax Update - Hold on to your wallets!

Mike Stott, was featured on KHON Channel 2 News at 5pm last Thursday.  He was speaking about the Governor signing into law the raise of the Conveyance Tax from .10 on every $100 of sales price to .20 if your sales price is $600K to $1M and over $1M is .30 per $100. In addition, if the property was not sold to a primary residence owner, there is an ADDITIONAL .05 added. That could mean up to a 1000% increase in dollars out of your pocket from just 7 years ago! (see example below)

And how do you prove what the Buyer is going to do with the purchase? I'm betting the escrow Companies collect the additional .05 on each sale and then you can try to fight to get it back.  That's a major flaw in the law in any case. The major Escrow Companies in town had their attorneys at the Governor's office yesterday trying to sort this out.

It's not enough that prices have doubled (so the tax had already doubled just due to rise in prices!)  they've more than doubled it again and then some!  Did you know about this?

Let's look at a real life example:

A nice Kailua home was worth about $450,000 in 1995.  If it had sold that year, the Conveyance Tax would have been $450 to the State of Hawaii.

If that same home closed this week at the current market value of about $1.2M, the Conveyance Tax would be $1,200 to the State or more than double 1995. That's fair, the market went up so the dollars to the State went up!

With the new law, as of July 1, 2005 the Conveyance Tax paid would be $3,600.  That's an 800% increase in the tax from just 7 years ago. And 300% more than last week.

As the law stands if that same home were sold to a non-owner occupant, then the Conveyance Tax to the State of Hawaii would be $4,200 or nearly a 1000% increase over 7 years ago at those values.

If you would like me to run the numbers for YOUR home, just email me at Donna@stott.com and I'll be happy to do that for you!

Is this going to effect Real Estate Sales in Hawaii? You bet it will.

Now, if you think THIS is a bad tax, get ready for next week.  If Governor Lingle doesn't veto the rise in General Excise Tax bill, you're going to think THIS is peanuts.  That one will hit EVERY SINGLE PERSON on Oahu...  It's pyramiding tax and every item you buy, every service you have from selling a home to getting your hair cut will cost you more.   A lot more. 

If you want to put your two cents in, then call, fax or Email the Governor's office and ask she VETO the raise in General Excise Tax! Then number is 808-586-0034.  Fax is 808-586-0006. And a link to her email is EMAIL GOV. LINGLE 

Comments

[dofollow]

I stumbled across this forum the other day and thought i would post it here.

If you are looking for quality dofollow backlinks, then http://dofollowforum.com has a load of free Blog Lists for you to download.

Just register at http://dofollowforum.com

thanks

Jack Smith