North Dakota is primed to become only the 6th state in our nation to have enshrined in its Constitution the prohibition of a sales tax on the transfer of real property. The legislature passed HCR 3006 which will be Measure 2 on the ballot this year and reads, “The state and any county, township, city or any other political subdivision of the state may not impose any mortgage taxes or any sales or transfer taxes on the mortgage or transfer of real property.”
As the sponsor of this legislation that passed the House in a bi-partisan vote of 89 yes to only 1 no vote, I was excited to see the support this bill had coming out of the last session.
The wording on the ballot is very clear as proponents are asking for a Yes vote to ban a potential tax. Real estate transfer taxes rarely come with an additional service provided to the property owner, but they do come in many shapes and sizes that include nominal fees or percentages based on sales price.
In cases where other states have such a tax, often the legislature is faced with efforts to increase those taxes slightly, but often, over time. Minnesota and South Dakota both have a transfer tax in place however Montana is one of the above mentioned that has successfully banned this through a similar process. Property tax owners already pay hefty property tax bills in many parts of the state and having a transfer tax added simply increases that burden.
To be clear, there are costs currently associated with the transfer of real property. The buyer incurs costs when borrowing money from their lender most often referred to as closing costs. Both buyers and sellers also incur other customary costs when selling and this amendment does not, nor was it intended to, address those costs.
The only real argument that’s been voiced has been, “let’s not change our Constitution” to which I reply, “this is precisely what we have a Constitution for, to protect private property rights and the taxation thereof.” A second concern of even lesser intensity is that this is something that should be left for the legislature to pass into century code.
The legislature has acted on this and prepared it for a ballot vote about one year and 7 months ago. Passing a bill is subject to legislative change in subsequent sessions…a Constitutional amendment is more permanent.
Vote YES on Measure 2 to permanently ban the use of real estate transfer taxes in North Dakota. For more information, visit www.VoteYesOnMeasure2.com