Wednesday, May 11, 2011

Must..... include...... Pittsburgh... and that darn transfer tax

The website has yet another list of cities unaffected by a bad economy and yup Pittsburgh must be on it.  Some interesting semantics in it. I  suspect they wanted to title that cities unaffected by recession, but the recession itself has been officially over for some time. We are going to make it to the next recession before local coverage of the economy turns as upbeat as the national media talks about us.  (and an addendum: Forbes has us #2 no less on their list just out of Best Places to Buy a Home Right Now.  I like the 'Right now' part.)


On a side note.. PG has taken up the issue of the toothlessness of the real estate transfer tax in the City of Pittsburgh.  and finally there is some note that this does not have to be this way and that Philadelphia has made significant changes to their real estate tax statutes to limit the shenanigans.  As I said earlier (or earlier, or earlier), fix this now and there could be significant revenue gains for the city in the future, especially if Sam is right and this type of real estate activity is ramping up here.  Even if there are significant legal or political issues to making such a change, you really have to wonder why this has no more than a very passing public debate over the decades as Pittsburgh lost money Philadelphia likely would have been collecting from similar transactions.

and I guess it means the Forbes folks did not find the transfer tax so intrusive as to keep us off their list which focused on residential real estate markets where us normal folks can't escape the tax.

The excuse that state law inihibits this is misleading.  2nd class city code can be changed as can 2nd class county code in Pennsylvania.  The question is has anyone in Harrisburg even suggested this over the years?  Maybe we could get some more attention for this if we called it a tax in lieu of a tax on electronic billboards tax?


Seriously, if you do a NPV calculation of all the future revenue that could be collected, you might be talking significant amounts.  In fact, someone ought to go fund a study looking back at how much has potentially been lost over the last decade because of the differences in how Pittsburgh can tax these transactions compared to Philadelphia.   Wouldn't that be an interesting number?

Philadelphia, by the way, at least on the surface of it does not seem to be suffering from the change in their transer tax laws a decade ago. In fact, Philadelphia has reveresed its own population decline and recorded an historic population gain over the last decade.  Hmm...

More likely there will be no follow up and this will all be lost in the shrubbery until the next big real estate transaction.


Anonymous BrianTH said...

The current state government is not all that favorably inclined to any sort of tax-increasing measure, even if it is only closing a loophole. For that matter, they are not all that favorably inclined to large cities.

But that isn't an excuse for failing to get this issue into the public discourse, because this won't be the state government forever.

Incidentally, my word verification looks like it could be "Why bother?" pronounced with a Southern accent ("wabothr"). Just thought that was funny in light of the content of my comment.

Wednesday, May 11, 2011 12:54:00 PM  
Anonymous MH said...

For that matter, they are not all that favorably inclined to large cities.

Pittsburgh is in luck then.

Wednesday, May 11, 2011 1:42:00 PM  
Anonymous MH said...

Back home, when people ask me what Pittsburgh is like, I say that is is like Omaha but smaller, more poorly paved, and with a worse baseball team.

Wednesday, May 11, 2011 1:45:00 PM  

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