Back in February of 2007, the Virginia General Assembly passed a law (HB3202) which, among other things, will allow the Northern Virginia Transportation Authority to increase taxes on homeowners in the form of an increased Grantor's Tax. Previously, the tax was set at $1 per $1000 assessed value to be paid on the sale of all residential property. Now that tax is increased to $5 per $1000. The new fee is still lower than our neighbors in Maryland and DC who see figures nearly 3 times higher with regard to transfer fees.
That said, no one wants higher taxes. But then, no one commuting in Northern Virginia really believes we can sustain the level of road congestion we see today. Something has to be done and no one is in agreement on how to do this.
Considering the state of the housing market, this may have been a great plan back when sellers were seeing record sales at record prices in record time! A mere $4 per $1000 in assessed value would have had little to no impact on the unstoppable market sellers enjoyed over the course of the last 5 years. But to impose this tax now seems like another nail in the seller's coffin. Those who have barely enough equity to sell, let alone pay their fees, will be hardest hit.
Originally, the tax increase was projected to generate about $171 million dollars in revenue. That, of course, was before the recent housing slump. The Northern Virginia Association of Realtors has gone on the record in support of this bill. "The law gave the nine-member Northern Virginia Transportation Authority the power to increase specific taxes to pay for transportation improvements in the traffic-choked region. The authority covers Arlington, Fairfax, Loudoun and Prince William counties and the cities of Alexandria, Falls Church, Fairfax, Manassas and Manassas Park. Other taxes slated to rise are the motor vehicle rental tax, the transient occupancy tax and the sales tax on auto repairs, as well as fees for vehicle safety inspections, and initial and annual vehicle registration."
There is significant opposition and online petitions have been spreading like wildfire since the bill was passed last year. Some in Northern Virginia oppose the plan. "In January, the Virginia Supreme Court will hear the combined appeals of State Del. Bob Marshall (R-Prince William) and Loudoun County, challenging the constitutionality of an unelected authority having taxing power. The plaintiffs say the transportation authority's ability to tax is an end run around the wishes of the voters, who rejected an increase in the sales tax to pay for transportation in a 2002 referendum."
The NVTA petitioned the courts on July 13, 2007 to verify whether or not they had the legal right to raise and spend more than $300 million dollars in new taxes and fees. The court hearing is scheduled for Tuesday, January 8th to review whether the Northern Virginia Transportation Authority can impose taxes and fees to pay for transportation projects. While the attorney general's office has assured the NVTA that they are within their legal rights to do so, the authority wants to be assured all petitions, objections and appeals will be resolved by the beginning of this year so that expensive projects will not have to be stopped in their tracks once started.
The authority will hold a public hearing Thursday, January 10th at 6pm at George Mason High School Auditorium located at 7124 Leesburg Pike in Falls Church to discuss its six-year transportation plan and solicit suggestions as to how these funds should be allocated.
Source: The Washington Post
http://washingtontimes.com/article/20080105/BUSINESS/225558785/1006
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/07/AR2007120701000.html?nav=hcmodule
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