Allows a municipality to set its own conveyance tax rate for residential properties sold in excess of $800,000.00 at $10 per $500. Provides collected taxes to be in a restricted account and distributed within 2 years for affordable housing.
Impact
The enactment of S2361 is set to significantly impact local taxation structures, as municipalities now have the option to implement their own conveyance tax rates, enhancing local revenue sources. The law mandates that the excess funds generated from these taxes must be placed into restricted accounts designated solely for affordable housing initiatives that benefit families or individuals with an annual income at or below 80% of the area median income. This stipulation aims to direct the financial resources collected into impactful community development projects.
Summary
Bill S2361 aims to amend the existing real estate conveyance tax in the state of Rhode Island, specifically targeting residential properties sold for over $800,000. The bill allows municipalities to impose a supplement tax rate of up to $10 for each $500 of consideration in excess of that threshold. This amendment is part of efforts to generate additional revenue for local governments while addressing the immediate need for affordable housing within their communities. It allows for a mechanism whereby the funds collected from this supplemental tax can be allocated specifically for affordable housing projects.
Contention
Notable points of discussion regarding S2361 involve the balance of local control versus state mandates. While proponents argue that the bill empowers municipalities to meet their unique housing demands directly, concerns arise about the potential burden on higher-end property transactions. Critics may point to the possibility that increasing taxes for residential properties may discourage buyers or investors, possibly affecting housing market dynamics. Additionally, there will be observations regarding the efficacy of the restricted fund mechanism and whether it will adequately result in the intended affordable housing developments.
Property insurance provided for grantee beneficiaries of transfer on death deeds; and technical, clarifying, and conforming changes made to transfer on death deeds.