Members of the Pennsylvania Association of Realtors (PAR) have voiced opposition to the proposed tax on professional services in real estate transactions.
Don Roth, PAR president, unveiled a survey revealing that 70% of Pennsylvanians polled opposed the proposed taxes that would drive up costs for consumers in the home-buying and -selling process.
‘Consumers in Pennsylvania will have to spend thousands of dollars more to purchase a home if Gov. [Edward] Rendell's plan is enacted,’ says Roth. ‘Housing will become less affordable and beyond the reach of many Pennsylvanians.’
According to Roth, the proposed tax would affect every profession and service connected to a real estate transaction. In addition to paying a 4% tax on real estate agent/broker services, consumers will have to pay a 4% tax on appraisals, attorney services, credit reports, mortgage originations, home inspections, surveys, title searches, construction, architectural services and site preparation.
‘Taxing professional services involved in the home-buying and -selling process will reduce demand for housing – something Pennsylvania cannot afford," Roth says. "Decreasing the demand for housing will only drag out the amount of time it takes for the state's economy to recover."
Rendell's proposed 2010-2011 budget includes reducing the state sales tax to 4% but expanding it to include 74 currently exempted items, including professional services.