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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  January 5, 2004  |   Ore.: Tax Plans Could Impact Real Estate A special upcoming session for 2004 to address the state’s $800 million shortfall is keeping the Oregon Association of REALTORSŪ busy, as lawmakers look at tax proposals that could impact real estate. A tax reform group comprised of state senators and representatives will be making recommendations to the general legislature by May 31. The three major tax revenue areas being suggested—a service business tax, a real estate transfer tax, and restricting or dropping the mortgage interest tax deduction—all stand to impact real estate. Modifying the mortgage interest tax deduction has been discussed since the 2003 session, according to OAR Governmental Affairs Director Jana Jarvis. “The original idea was that eliminating the deduction would apply only to high-end homes. But I’m concerned the legislature may try to expand that,” she says. “If you limit the effect to homes above $300,000, the state could gain $200 million in revenues. If the state does away with the deduction entirely, it could raise $1 billion. But that will affect every homeowner in the state—most of us factor in the mortgage interest tax deduction when we buy a home.” A transfer tax has been suggested at every legislative session for years, according to Jarvis. Most advocates for a transfer tax want to apply the money to affordable housing programs, such as rent subsidies, but in 2003 the schools also started fighting for a transfer tax that would be applied to their budget. “I fully expect one or both of these groups will push for one in Oregon,” Jarvis says. A citizens’ initiative group proposed a service tax in early December. Jarvis feels a service tax, which would apply to real estate practitioners, doctors, attorneys, and other professionals, impacts small business more strongly than big business. To help fight the initiative, she plans to form a coalition with other professional groups. The Oregon legislature is expected to meet in early June to discuss the tax reform group’s recommendations. —By Paul Beakley for REALTORŪ Magazine Online

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