Over-reliance by localities on proffers and real estate sales diminish Virginian’s pursuit of the “American Dream.”

The Virginia Association of Home Builders has recommended to the 2008 General Assembly the usage of impact fees and the removing of “cash proffers.” Their plan would extend the impact fee to all zoned, but undeveloped land, implement a cap on the amount that could be assessed, and require localities to dedicate the fund for the new or anticipated infrastructure derived from the new development. Additionally, the “Home Builders” have proposed to raising the Grantor Tax in the localities where the impact fees would be effective and to dedicating those tax revenues to the new and existing infrastructure.

The Virginia Association of REALTORS® opposes the raising of the Grantor’s Tax and supports replacement of cash proffers with impact fees. Without impact fees the “Virginia Association of REALTORS®” does not support relinquishing the current “cash proffer” system.

Professionally speaking, the Grantor’s Tax has increased by 40% - 400% in the last 6 – 18 months, and no further fees should be assessed on these individuals, or transactions, (sales or purchases of real property). The Grantor’s Tax is paid each-and-every time a “real property” is transferred. This is one of the most abusive and abused tax existing in our area. If a home is 48 years old and has transfer once every 6 years, the Grantor and Grantee Taxes have been paid 8 times. The original intent of these taxes was to offset the impact of the property on the infrastructure within the specific locality. In the long term, the fees are “rolled into the selling price” by the seller, for the purchaser to pay.) This tax has an impact on all vacant land parcels and homes: those buyers on the “lower end” whom are already struggling to purchase are hurt hardest. Localities and the state should not charge this tax now, nor future times…. and times… and times again.

This is another example of hidden taxation that the legislators of Virginia have utilized for many years.