Tax Chat

As City Council proposes new high-end home tax, realtors and residents weigh in

More than 50 people asked the City Council on Wednesday to pass an ordinance that would pose a high-end excise tax for home sales on the Nov.7 city ballot.

Under the proposal, voters would decide whether to impose a 3% excise tax only on the portion of the home sale that exceeds $1 million, which would be used to support the city’s Affordable Housing Trust Fund. (This means that the buyer of a home priced at $1.1 million would pay $3,000 in taxes, or 3% of the $100,000 that exceeds the million-dollar threshold. The threshold would change over time based on the consumer price index for urban workers.)

Almost all of those who spoke at the hearing expressed support for the idea, including representatives of the Old Santa Fe Association, the New Mexico Interfaith Housing nonprofit and Chainbreaker Collective. Many in support of the measure asked the councilors for more, such as further policy to support affordable housing or for the proposed tax to apply to new home construction over $1 million as well as sales. One attendee came bearing a sign that read “3% is NOT enough.”

Bill Roth, a longtime general contractor currently serving on the board of Interfaith Housing, praised the bill and advocated for taking it even further.

“As a builder, I have watched home prices increase. My clientele is pretty much the same but what they are paying for the house I build has gone up. I can comfortably say if I have a client that can afford a $1.5-million house, they can afford the extra $15,000. Honestly, that is like an upgrade on their appliance package. That will not keep anybody from building a new home,” said Roth.

Anisa Gallegos, a member of Earth Care New Mexico, endorsed the bill in tears, saying she and her family currently lived with her grandparents due to rising housing costs.

“If people can pay that much money for a house, people who have lived in Santa Fe for their entire lives should be able to [afford a home] as well,” Gallegos said.

Backers of the tax can expect opposition from the Santa Fe Association of Realtors. The sole voice in the room to oppose the tax came from Andrea Dobyns, former association president, who described the idea as “inequitable” and “divisive” and questioned the use of money allocated to the fund by housing advocates—a similar argument the group raised when it helped beat back a “transfer tax” ballot measure in 2009.

“The Santa Fe Association of Realtors will not be able to support this,” Dobyns said. “Housing advocates have not done an effective job in demonstrating how the funds will be used.”But not all the association’s members share that position. Realtor Adrienne Harvitz, for example, said she supported the tax. “I think there are many people that would be willing to contribute when they understand so specifically where those funds would be going and benefitting our community,” she said.

Sharon Shoemaker, who worked as a realtor in southern New Mexico prior to moving to Santa Fe, sympathized with the association’s concerns, but doubted the negative impacts on home sales.

“I understand why it might feel threatening, but I don’t think any realtor is going to lose a sale as a result of this tax,” Shoemaker said.

Other endorsements came from those who had already been helped through the Affordable Housing Trust Fund. John Chavez said his grandmother lost employment after a knee surgery, but with the help of YouthWorks, his family was able to find affordable housing and continue living in the city.

“I support this because it helped me. It could help everybody else, and I believe everybody deserves a shot,” said Chavez.

The bill, co-sponsored by Councilors Jamie Cassutt and Renee Villarreal, now moves on for two committee hearings in July before a potential City Council vote Aug. 9. The last day for the city to submit ballot language for the Nov. 7 election is Aug. 29, according to County Clerk Katharine E. Clark.

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