Realtors weigh in on the proposed Realty Transfer Tax increase in Johnstown
JOHNSTOWN, Pa. (WJAC) —
A proposed tax increase that the city of Johnstown hopes will help generate extra revenue could end up dissuading potential homeowners from buying a home in the city.
During next week’s city council meeting, a proposal will be on the agenda to increase the realty transfer tax.
According to the agenda, council is proposing a 1.5 percent increase that would take effect Feb. 1, 2019.
“Well what the Real Estate Transfer Tax is in this part of the state is a 2 percent transfer tax. It is paid anytime a property transfers,” said Cambria Somerset Association of Realtors President Bill Lease.
“One percent goes to the state, a half percent goes to the municipality, in this case it would be Johnstown, and the other half would go to the school system,” said Lease. “What the city is proposing, from what I understand, is to increase their part from a half to 2 and a half percent.”
Lease goes on to say this increase is frustrating for realtors in the area.
“Whenever you are looking at a depressed area trying to sell, then adding additional cost to the closing cost as far as transfer tax, adds an extra burden to the buyer and the seller.”
Lease says although this may make the city some money, if the tax increases it may dissuade potential buyers from choosing to live in the city of Johnstown.
“What is going to stop buyers from going to some of the other municipalities who do not have this tax or that high of a tax?” says Lease. “So, it could cost them money in the long run, where people just won't buy in Johnstown. They will just buy in other areas.”
6 News did reach out to the city for comment on the matter and have not heard back.
If you are interested in speaking out against the increase, the next city council meeting is taking place Dec. 12 at 6 p.m.