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Adding another fee on Luzerne County real estate transactions would hurt people buying homes and refinancing, a representative of the county’s Association of Realtors Association told council members.
A fee of up to $15 was suggested on deeds and mortgages recorded in the county to create a fund to demolish blighted properties in the county’s 76 municipalities. Council members may vote on the proposed ordinance in coming weeks.
The real estate market has become an “easy target” for fees to help fund a range of programs, association representative Brittany Kinsman said at a council work session earlier this month.
“We are slowly picking away at the American dream of home ownership,” she said.
Several fees already are added to deed and mortgage filings, according to Mary Dysleski, who oversees county deeds and wills.
For starters, there is a $35.50 state fee for two judicial-related purposes that have no direct link to real estate— the Judicial Computer System Augmentation Account, which funds the operation and continued development of statewide criminal case management systems, and the Access to Justice Account that provides civil case legal representation to the poor, Dysleski said.
Another $0.50 goes to the state for a “writ tax.”
The county charges:
• $13 base recording fee to offset deed office operation costs
• $3 recorder’s archive fee to automate and scan records and buy computers and other equipment in the county deeds office
• $2 archive fee for other county offices, which has primarily been tapped to pay for county record storage space
• $13 for a Housing Trust Fund the county implemented in 2003 to provide matching funds to income-eligible, first-time home buyers and other affordable housing initiatives.
The tally so far: $67.
This doesn’t include the biggest charge — realty transfer tax — which applies to real estate purchases but not refinancing. Some transfers are exempt, such as those involving parents to children.
When transfer tax kicks in, the state receives 1 percent of the transaction.
The school district and municipality equally split another 1 percent in all municipalities except Kingston, Hazleton and Wilkes-Barre, where the municipalities receive more, Dysleski said.
Hazleton and Kingston receive 1 percent, while Wilkes-Barre is paid 2 percent, she said.
Using a $125,000 purchase as an example, the transfer tax payments would be $1,250 for the state and $625 for the school district. The municipal share is $1,250 for Kingston and Hazleton, $2,500 for Wilkes-Barre and $625 in the other municipalities.
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Kinsman said her organization recognizes abandoned properties can decrease the value of nearby residential properties and strain local governments.
Instead of tapping home owners and buyers, blight reduction should be funded by broad-based taxes or existing county community development funds, she said.
“It’s unfair that responsible property owners and buyers continue to be punished for an issue that affects the entire community,” she said. “Every little bit adds up.”
Boroughs and townships receive county community development funding every three years for public improvement projects, which could include blight elimination, and they may have access to other community development funding for demolition depending on the project and demand.
A few council members criticized the proposed fee, including Stephen A. Urban.
“Everybody’s digging into your pocket,” he said. “Now we’re asking good people to pay for bad behavior.”
Councilman Eugene Kelleher said home buyers should not be forced to pay a new “sizeable fee.”
The blight fee was authorized by state law in November, and several counties have implemented it to date, Dysleski said. Council also would have flexibility to adopt a lower fee.
The county community development office would oversee the new blight fund if it is created, officials said.
The county processed 10,583 deeds and 8,679 mortgages in 2016. Based on that volume, a new $15 fee would generate $288,930.
As of Oct. 13, this year’s tally was 14,443 deeds and mortgages, Dysleski said Monday.