The Williamsburg Real Estate Blog

Almost every seller and numerous buyers have asked me about the "transportation tax" lately.  Well if you thought it was a hot topic before, it has really started to heat up now.

There is a lot to this bill that I wont get into, only because I'd like to stick to the subject of how it directly pertains to real estate.  In summary, the way the bill was written, 40 cents from every $100 of the value of a home would go to fund the project whenever a home is sold.  For example on a home that sold for $400,000, $1600 of the proceeds would go to the HRTA. 

One of two things typically happen in a situation like this.  Either the seller raises their price of their home to make up the difference or the seller ends up netting less money at closing. 

Both situations usually come out with a negative effect for the seller.  If the seller raises the price, the home takes longer to sell.  If they simply ride it out and pay the tax at closing without raising their price, they end up with less money in their pocket.

On the contrary the buyer gets better roads out of the deal and doesn't have to pay until they try and sell the house (unless you take into account  the other taxes associated with the bill --tolls, various automobile fees and an additional gas tax).

All that said, for now the bill has been ruled unconstitutional by the Virginia Supreme Court.  I say "for now" becasue residents of Virginia know that we need the additional road improvements, but few agree on how we should pay for them and who should pay the brunt of the cost.  

If you are either buying or selling in the Hampton Roads market, this is an issue to keep up with in the coming year.