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1mb <br /> itoATIO�RS <br /> Home Builders Association of Durham and Chapel Hill <br /> CI <br /> niburlwm&ChapelHill 21 W Colony Place • Suite 280 • Durham, North Carolina 27705 • Phone 919/493-8899 <br /> April 6, 1987 <br /> Mr. Don Willhoit <br /> Chairperson <br /> Orange County Commissioners <br /> 203 Lexington Rd. <br /> Chapel Hill , NC 27514 <br /> Dear Mr. Willhoit: <br /> The Durham-Chapel Hill Home Builders Association represents over 500 <br /> member firms who are either builders of residential property, or are <br /> in related trades or businesses. Naturally, an issue that affects <br /> real estate as directly as the proposed Transfer Tax is of vital interest <br /> to our members. <br /> This issue is one that is being brought up throughout the state as <br /> local governments wrestle with the issue of funding the programs that <br /> are desired by the citizens of the various communities. While we sympathize <br /> with the problem that faces Orange County and all the other cities <br /> and counties across the State, we believe that SOME answers to that <br /> problem are simply wrong answers. The Transfer Tax is a specific solution <br /> to a specific problem faced by counties like Dare and Currituck who <br /> face absentee ownership with extremely limited opportunities to raise <br /> revenue. The Transfer Tax is NOT a general solution. <br /> To demonstrate the current dollar impact on a project, I have calculated <br /> the effect of the 1% tax on a single family home project built on 40 <br /> acres of ground with a raw land price of $30,000 per acre. At a density <br /> of 2 houses per acre a lot could be expected to sell for $30,000 and <br /> a final house sales price of $150,000 would be conservative. While <br /> these numbers are not precise, they are realistic and will provide <br /> a basis for calculation. <br /> The tax on the original sale of the land would be $12,000 which in <br /> this seller ' s market , would add $150 to the cost of developing every <br /> lot. Another $300 would be paid (and passed through) by the seller <br /> of the lot when sold to a builder. The Transfer Tax on the house and <br /> lot to the eventual owner would be $1 ,500, a non-deductible total tax <br /> of $1 ,950, increased cost for the citizen who has the misfortune to <br /> buy a new home in a county with a Transfer Tax. <br /> r;r;, <br /> d <br />