A real estate tax proposed last Tuesday by a Jackson lawmaker could allow voters to levy a fee on the sale of expensive property in Teton County.
Rep. Andy Schwartz, a Democrat, said the tax has long been discussed and highlights the need for local governments to be able to raise money independently.
“The state can’t support them,” Schwartz said. “We need, as the Legislature, to take responsibility for giving them opportunities to take new revenue streams.”
Schwartz has not yet released a final bill, but said that the measure would simply allow county commissioners to pass a resolution triggering a referendum where voters could choose whether or not to approve the tax.
There would be no tax on the sale of property up to $1 million. From $1 million to $2 million the tax would be 1 percent. A 1.5 percent tax would be levied on sales up to $5 million and 2 percent for sales above that amount.
Because the bill would only apply to counties where annual property sales exceed $600 million, it would only exist in Teton County. However, Schwartz said he would be open to lowering that threshold if other counties were interested in having the option to ask voters to pass the tax.
Most states in the nation have real estate taxes, but the proposal will face stiff opposition from the industry in Wyoming.
Wyoming Realtors president Devon Viehman, herself a Jackson real estate agent, said that while she was not familiar with the details of the bill, the Realtors organization opposed taxing property sales regardless of whether the tax applied to all homes or was tiered.
“Any sort of transfer tax is tough and Teton County here, for locals, is tough enough as it is,” Viehman said. She said the focus was on affordability.
Viehman added that lawmakers shouldn’t target Teton County simply because of the high proportion of wealthy home owners in the area. She said a tax of any sort would make all housing in the area less affordable, including homes that teachers and low-wage workers might purchase, and that a tax that was initially narrowly-targeted could become broader over time.
“You can’t target Teton County just because of the wealthy second-, third-, fourth-, fifth-home owners we have here,” Viehman said. “Anything they do to make it more expensive to buy and sell is going to be detrimental to our locals.”
She also said that the wealthy homeowners come to Jackson specifically because of Wyoming’s low taxes and that could change if a real estate tax was passed.
Schwartz was unmoved by the argument that passing a tax would make housing in Teton County even less affordable or that it would deter wealthy Americans looking for a low-tax location for a vacation home.
“Yeah, yeah, yeah,” he said. “No comment.”
Schwartz said that the tax was not simply meant to be progressive. Expensive homes are often located in far-flung parts of the county away from municipal or county services. Extending police, fire and medical care to cover those residents is disproportionately expensive, he said.
The bill’s language is being finalized and Schwartz said he was unsure whether revenue generated by the tax would be decided in the bill or whether the county commission would decide where the money would go before asking for voter approval.
A real estate transfer tax was a recommendation of the Tax Reform 2000 panel, a state panel convened in the late 1990s to examine ways to diversify Wyoming’s tax base. The panel was created amid an economic downturn, but by the time its report was released at the turn of the millennium, a natural gas boom had led to an economic rebound and most of the report’s recommendations were disregarded.
Schwartz said that while he was proposing the real estate tax in part to draw attention to the plight of local governments in the state, he also believes the Legislature might pass it during their session that starts in February.
“I think it has a shot,” he said.