Initiative Would Tack Fee on Homes that Sell for More than $750,000
The New Mexican
In-person voting has begun in Santa Fe’s citywide special election for a real-estate transfer tax on sales of expensive homes – a ballot initiative that some expect will have a close outcome.
While absentee ballots had been available for a week, voters on Wednesday were able to cast the first ballots to be inserted directly into automatic-tabulation machines at the City Clerk’s Office.
The sole ballot question for the March 10 election is whether residents want to impose a fee on any part of a home’s sale price that exceeds $750,000. For a home that sells for $800,000, for example, the tax would be $500. Revenue would be used for affordable-housing programs.
“The principle is simple: If you have it, share it,” said Robin Gould, director of the Northern New Mexico Central Labor Council, who was among speakers at a lunchtime rally outside City Hall.
Tax supporters are going door to door and conducting “phone bank” campaigns in an attempt to gather support in the days leading up to the March 10 election.
“It’s probably going to be close, but I think we are probably going to win,” said Hank Hughes, director of the New Mexico Coalition to End Homelessness.
Those who oppose the tax are also actively campaigning, although they’ve skipped the front-lawn-rally approach. They’ve already spent nearly $60,000 on their campaign. An ad-hoc political action committee is backed by the New Mexico Association of Realtors and a local industry group.
Donna Reynolds, executive director of the Santa Fe Association of Realtors and head of the local campaign, said a note-card advertisement should hit mailboxes soon, and the group continues its own phone calling.
“The folks that we are talking to, we are telling them that every vote will count and we hope that they will get out and vote,” she said.
Among concerns of tax opponents, Reynolds said, is that the law would subject a certain set of homes to such taxation in perpetuity while others avoid paying the fee. Several exemptions are written into the law, including homes that are part of developments subject to affordable-housing rules that came into play in Santa Fe in the mid-1990s, those that are sold because of a will or foreclosure, commercial property, vacant land, family transfers or interspousal transfers.
“It’s probably going to get down to ‘Who is the poor soul who has to pay the tax?’ ” she said. “Certainly, people will make an effort to get out of it.”
When the City Council approved the ballot measure last year, city staff estimated the program would rake in about $1.3 million during the first full fiscal year of collections.
Considering market changes since then, however, the tax is not likely to bring as much revenue as the city originally predicted. The city recast its expectations and changed some mapping assumptions, settling on a revenue estimate for the first year of about $600,000, said Kathy McCormick, director of the city’s Housing and Community Development Department.
Even with less revenue, McCormick said, the tax would still help those in Santa Fe who are on the edge of being able to afford to buy a home.
“The only thing that will happen is that you will see fewer homes and families that we will be able to assist with that money,” she said. “So it will rise and fall along with the market.”
The city has already hammered out a five-year housing plan that outlines how the new revenue would be spent. It includes programs to provide down-payment assistance and for the city to purchase vacant land. McCormick said those are among the first ways the money is likely to be spent.
City ordinances prevent any of the revenue from such a tax to be used for administrative purposes, according to a city attorney opinion. The city would also have to ask for voter approval for changes to the law, such as increasing the fee or lowering the price threshold at which it applies.
Of the city’s roughly 52,000 registered voters, about 120 already have cast ballots, including more than 60 who voted Wednesday.