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Counties, Realtors Wrangle Over Price of Development

By Megan V. Williams

Wilmington, NC – Who pays for new development?

That's the question behind a slew of bills in the General Assembly to extend the power of counties to tax real estate. The majority would allow specific counties to levy real estate transfer taxes, but several would provide the option of impact fees, billed to developers instead of individual property owners.

Brunswick County Representatives Dewey Hill and Bonner Stiller sponsored the bill to allow that county's Board of Commissioners to impose an impact fee tied to the increased burden new residents put on roadways, schools, and emergency services.

Shallotte town manager Paul Sabiston is in favor of the proposal, saying that it's only fair to passing the cost of new services on to new residents.

By way of example, Sabiston points to Brunswick Forest, the massive new development near Leland, which will bring thousands of new people to the county. "They come in and the only way the local governments can handle that growth and that demand on the public safety side of it is to raise taxes," he says, "and so who pays for it? Primarily the present people who are here, along with the new property owners."

However, these kinds of new taxes and fees are strongly opposed by state and local homebuilders and realtors associations, who say that in the end, it's homebuyers who suffer.

Bill Bright, a realtor with the Brunswick County Homebuilder's Association, says an impact fee could hurt the local housing market and would be an unreliable source of income for the county, fluctuating with the ups-and-downs of the real estate market.

But worse, Bright says, developers would pass the burden of the tax onto the buyer, and that for some, a few thousand dollars extra could make the difference when they're seeking a mortgage.

"It actually just picks on the homebuyer to pay additional costs for a house," Bright says, "whenever we raise the costs of a house, we automatically eliminate so many first-time homebuyers."

The North Carolina Realtors Association claims its 'Stop the Home Tax' campaign has generated more than 8,000 emails to legislators.

The North Carolina Association of County Commissioners supports the land transfer tax propositions, saying the six counties with such taxes in place have not seen their growth slow.

In addition to nearly a dozen bills that would allow specific counties to levy real estate transfer or impact fees, there are also bills pending to grant those powers statewide.

More Information: HB 1216 - Brunswick County Impact Fees

Two Views:
The NC Association of County Commissioners
The NC Association of Realtors


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