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Real estate transfer tax credit for first time homebuyers?

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On Wednesday, January 24 the Senate Ways and Means committee heard testimony on a bill to give a tax credit to first-time homebuyers in New Hampshire.

Whenever property is sold in New Hampshire, both the buyer and the seller pay a 0.75% real estate transfer tax on the price of the home.

A proposed tax cut

SB 301 would decrease that to 0.50% for first-time home buyers, a savings of $250 per $100,000.

Since the state does not currently track first-time home buyers, the Department of Revenue Administration could not calculate the financial impact of this bill. However, using data from realtors, committee members estimated the financial impact would be about $4 million less in annual state revenue.

Encouragement for first-time buyers

Bill supporters argue a tax credit will encourage more young people to move to New Hampshire. New Hampshire has an aging population, and one of the factors driving young people out of state is the relatively high cost of homes.

Click here to learn more about the challenges of an aging population in the Granite State.

New Hampshire also has one of the highest real estate transfer tax rates in the U.S.

A meaningless gesture?

Bill opponents argue that this tax cut is too small to have a meaningful impact on first-time home buyers. They contend the state should instead focus on increasing the supply of affordable housing, including rental housing.

Click here to learn more about the policy debates around rental housing in New Hampshire.

Do you support SB 301? Share your opinion in the comments below.

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