On December 14th it’s likely that Nassau County will approve real estate fee increases making it the most expensive jurisdiction in New York State in terms of closing costs!
It’s an unfortunate case of deja vu’ all over again as Suffolk County this week is prepared to do some of the same with mortgage document recording costs!
In what can only be describe as the ignominious treatment of current residents and prospective residents, Nassau County, New York is picking the low hanging fruit of revenue enhancement by attacking a small subset of the electorate (real estate transactions) while pandering to the majority (property taxes).
And unfortunately, as with most politicians the alternative methodology of budget balancing by slashing expenditures that exist in the form of fat and excess is never actually a major part of the fiscal process!
It’s also been mentioned here any number of times in the past that these revenue schemes represent nothing more than a ‘money grab and as regressive a tax as has been seen in some time! And, by some time, that means last year‘.
Last year, Nassau County hiked the tax map verification fee by 200% from $75 to $225, and increased the per-block recording fee by 100% from $150 to $300.
This year, Nassau County considered an increase in the mortgage recording fee from $300 to $350. LIBOR joined a coalition of industry groups that lobbied against any increase in mortgage recording fees.
The Nassau County Legislature initially passed a budget that contained no mortgage recording fees, or tax map verification fees. However, under New York State Law, NIFA (The Nassau Interim Finance Authority) has the right to reject the budget if it is not balanced.
NIFA rejected the proposed budget, and now it has been sent back to the county government for re-negotiation. As of Monday, November 28th, excessive real estate fees are back on the table, this time in the form of a $125 hike in the Tax-Map Verification fee. The current fee stands at $225, this proposal would raise the fee to $355!
• Targeting the real estate transaction is short sighted, because it fails to recognize the positive economic impact that a home sale has on a community.
The National Association of REALTORS estimates that a typical real estate transaction in New York State generates, on average, over $69,000 in economic stimulation, including additional expenditures on moving truck services, consumer items such as appliances and furniture, and dining at restaurants. Of course, the value of that stimulation is even higher on Long Island, where the cost of living is much higher than in other areas of the State.
• Proponents of the fee increases fail to recognize that these massive fees negatively affect the real estate market. Increasing home purchasing costs will create a drag on the local economies and further, will negatively impact sales tax revenue. The increased fees negatively affect all facets of the real estate market, but this coalition would like to draw special attention to the affordable housing market. Long Island has a high demand for both available and affordable housing. Young people working on Long Island and in the city, retired citizens looking to downsize to a more manageable living space and low income families all create this demand.
• Long Island has made great strides in increasing the stock of affordable housing. Unfortunately, regulations that send closing costs soaring, creates another financial obstacle for those hoping to access this housing and undermines the progress that has been made.
• As housing advocates for the public, we the aforementioned industry groups call on the leadership in Nassau County to consider the short and long term effects of these fee hikes, and swiftly reject any budget that raises real estate related fees.
• Excessive Fees that contribute to massive closing costs will have a negative effect on home values. When home resale values begin to fall the county will have no choice but to raise the tax rate.
• This is the second fee hike in two years. LIBOR stood in opposition against this fee hike and we were given assurance that it would be a one-time increase to help balance budget. It’s one year later, we are debating another fee increase and the budget is still not balanced. It is time for a different approach.
• Please STOP sending mixed messages. Either Nassau County wants to attract and retain young people or not. Raising real estate – related fees sure makes a statement!