Kentucky HB 78 - Let's just REALLY screw up the Kentucky Real Estate Market!
Seriously, I am really ticked off about this bill. In a nutshell, this bill would allow the state to TAX REAL ESTATE SERVICES. It expands the sales and use tax base to include certain services including those related to a real estate transaction and the rental of commercial real estate. So, what types of services could/would they tax? Well, think of all of the services related to a real estate transaction: appraisals, title work, home inspections, title insurance, transfer fees, commissions, etc. How much? Well, my interpretation is that it will be the same as any other sales tax - 6%. Now, the only good thing about his bill is that the current tax of 6% would be reduced to 5.5%.
So, who do you think is going to be paying all these additional taxes? Well, in the end, the consumer. We are already seeing appraisal fees that have gone from $300-ish to over $500. Where will it end up if this Bill passes? What about the cost of inspections? Typically they are $250 - $300 in this area; will these fees also go up?
I understand that the supposed purpose of the bill is to generate more income for the state, but, in the long run I truly believe they will be cutting their nose off to spite their face. This bill will not only cost buyers more money, but also all of the hardworking folks related to and in the real estate industry.
So, what can we do? Well, a start is to contact your representatives and protest - LOUDLY! I plan to post information on TWITTER, FACEBOOK, and, of course, MY BLOG.
Please, don't sleep on this one folks, then turn around and whine about it when it's too late!!
UPDATE - Just an FYI, this tax is not just geared toward real estate services. This will also affect any services you use: heating & air conditioning, plumbing, accountant, hair dresser/barber, and DAY CARE!!
