The state’s ability to impose a real estate transfer tax, which has never been levied in the past, will be up for a statewide vote Saturday.

If Constitutional Amendment No. 1 is passed during Saturday’s election, neither the Louisiana Legislature, nor any parish or city government in the state, will have the ability to ever impose real estate transfer taxes.

If Amendment No. 1 is not passed, state and municipal governments would maintain the option of levying a transfer tax that would be imposed whenever property is purchased or sold.

Real estate transfer taxes can either be based on a percentage of the real estate’s value, or a fixed-dollar amount, which is added to the sale of that property.

For

Pat Caffery, owner of Caffery Real Estate, said he is for the passage of Amendment No. 1. Caffery said it is important for the people of Louisiana to make their voices heard Saturday and forever put a stop to the possibility of what he described as “double taxation.”

“We pay property taxes the whole time we own property,” said Caffery. “We really don’t need to place any additional burden on the sale of real estate, and that’s why it’s important to vote for Amendment No. 1 so we can prevent the Legislature or any political subdivision from ever doing it.”

Caffery said neither Mississippi nor Texas has a transfer tax, which is another reason Louisiana should avoid giving the Legislature that option in the future.

Citing the recent sale of 13 acres of property to Trinity Liftboats for $300,000, Caffery said if a transfer tax was present, between 0.5 percent and 3 percent, or about $6,000 more could have been added to the bill of sale.

“There’s no current plans to levy the tax, but if the people say ‘yes’ to Amendment (No. 1), the Legislature can never override that,” said Caffery.

“We need to stay competitive as a state, and how would we attract new business and industry with an additional tax?”

Against

Barry Erwin, president of the Council for a Better Louisiana, said although he is not a proponent of a tax increase, he also does not condone placing restrictions on the state’s constitution, which would occur if Constitutional Amendment No. 1 is passed during Saturday’s election.

While agreeing with Caffery’s side of the argument, namely that such a tax would hamper an already slow real estate market, Erwin said instead of barring such a possibility statewide, it is important to maintain the semblance of small government on a local scale.

“Why should the state intervene in local affairs any more than the considerable degree it already does?” questioned Erwin.

“The more the state ties the hands of local governments to govern, the more dependent they become on the state — which sounds a lot like the arguments states constantly make against the federal government.”

Erwin also said it is highly unlikely that such a tax would be levied in the near future. Citing a state attorney general’s opinion, Erwin said for a local government to levy a real estate transfer tax, it would first require Legislative approval and then a vote of the people.

“It’s hard to imagine any political traction for this type of tax,” said Erwin.

“The state has never levied such a tax and if local governments wanted to, they would face considerable obstacles.”