Commissioners set transfer and excise tax rates

May 21, 2003|by TARA REILLY

The Washington County Commissioners on Tuesday set tentative excise and transfer tax rates on new construction and real estate transactions expected to raise an extra $2.4 million for the county.

The County Commissioners voted 3-2 on the proposed rates, which will be taken to a public hearing on June 10.

Commissioners President Gregory I. Snook and commissioners James F. Kercheval and Doris J. Nipps voted in favor of the proposed rates.

Commissioners Vice President William J. Wivell and Commissioner John C. Munson opposed the proposed rates.

The Maryland General Assembly last month gave the County Commissioners the authority to implement the tax on real estate transactions and new construction.


The state law requires that $400,000 of the excise tax revenue go toward agricultural land preservation.

The remaining $2 million may be used for school construction, public safety, transportation and debt reduction. The county has included the tax revenues in its fiscal year 2004 Capital Improvement Program.

Some commissioners have said they need the tax revenues to renovate aging schools and for other school construction projects.

"No one wants to do it..." Snook said before he voted for the proposed rates.

The law allows the commissioners to charge a transfer tax on real estate transactions of up to .5 percent. An excise tax would be limited to $1 per square foot on new construction.

The commissioners voted to preliminarily set the excise tax at 25 cents per square foot on the construction of new single-family homes for fiscal year 2004. That tax would increase to 50 cents per square foot on single-family homes in 2005 and to 75 cents per square foot on single-family homes in 2006.

The excise tax would be set at $1 per square foot beginning in fiscal year 2004 through 2006 for all other types of homes, such as multi-family and townhouses.

The commissioners also decided to tentatively set the transfer tax at .5 percent, with the first $50,000 of the selling price of any property exempt from the tax.

Kercheval said exempting the first $50,000 from the tax would make it easier for young buyers to place down payments on homes.

Munson said any kind of tax would put a burden on young, first-time homebuyers.

"You're going to see a lot of younger people leaving the county because they can't afford it," Munson said to Kercheval. "You're trying to run them poor, young kids out of the county."

How they voted

The Washington County Commissioners voted to set preliminary excise and transfer tax rates on new construction and real estate transactions.

Yes: Snook, Kercheval, Nipps

No: Wivell, Munson

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