Hidden Taxes

Taxes are no secret but the state, and counties have ways of raising taxes that are kind of hidden, at least hidden enough so that few people notice that they have just been hit with a tax.   It works well for our lawmakers who vote for these tax increases too.  If voters don't notice then nobody gets hurt, unless of course you have to pay the tax.

Both Ramsey and Hennepin county have raised the taxes charged to when a deed to real property is transfered from one party to another.   You look at this post and say so what?  It is a very clever tax.  It is paid by sellers, generally at the closing when they sell their home.  They pay a state deed tax of 0033%  with an extra .0001% surcharge added on by the counties.   We like to collect taxes from a few, to serve the many.  The state deed tax charged in Hennepin and Ramsey county went up .0001%, for a totally of .0034%.  The  a mortgage registry surcharge of .0001 and a deed tax surcharge of .0001 set to expire in 2013.  Oh I forgot we have a state mortgage registration tax too.

The number looks harmless but on a 200K home it comes out to 680.00.  When the price of homes was going up like crazy most sellers did not notice the tax.  Now that there are fewer home sales, who knows they may have to keep raising it to make ends meet.  If they raise everyone's taxes we will all scream bloody murder and some of out elected officials will not get re-elected.

Buyers also pay a little extra tax that no one notices, the state .0024 mortgage registry tax.  On a 200K house that can come out to $480.00, another hidden tax. Often when elected officials promise not to raise taxes they hide them.  Unfortunaly the cost of everything goes up and sometimes taxes need to go up too.  I think a general tax increase would be more transparent.

The tax surcharge added on by the counties is put into an environmental fund.  Makes sense doesn't it?  Still trying to figure out how transferring a deed or giving a mortgage is hard on the environment but I am sure if I think hard enough it will come to me.

The Minnesota Association of Realtors fought the tax, but they did not win this time.