Relating to real estate transfer tax moneys transferred to the housing trust fund

Same legislation: HF 2163

Official bill page Lobbyist declarations One-pager to print

Where it is now

Done: IntroducedJanuary 16, 2020
Done: SubcommitteeJanuary 23, 2020
Stopped: Senate committeeDied when the General Assembly ended
Next: Passes the Senate
Next: House committee
Next: Passes the House
Next: To the Governor
Next: Signed into law

Died when the session ended The 2020 session adjourned on June 14, 2020, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?

What’s in it

AI summary Currently, there is a limit on how much money from real estate transfer taxes can go into the state's housing trust fund each year. This bill removes that limit so all of that money can be sent to the fund instead of the state's general fund.¹

Read the official explanation

Under current law, percent of the real estate transfer tax receipts paid by county recorders to the treasurer of state are transferred to the housing trust fund in any one fiscal year, subject to a $3 million cap; moneys in excess of the cap are deposited in the general fund of the state. This bill eliminates the cap.

Full bill text²

Senate subcommittee

Named January 23, 2020. On January 29, 2020 it recommended passage.

Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part

Fiscal note

AI summary This bill removes the $3.0 million annual limit on how much real estate transfer tax revenue goes into the Housing Trust Fund. It is estimated that this change will increase Housing Trust Fund revenue and reduce the state's General Fund revenue by $4.3 million in fiscal year 2021, $4.4 million in fiscal year 2022, $4.6 million in fiscal year 2023, $4.7 million in fiscal year 2024, and $4.9 million in fiscal year 2025.³

Read the fiscal note

Description

House File 2163 eliminates an annual $3.0 million limitation on the amount of real estate transfer tax revenue that is deposited in the Housing Trust Fund. The change is effective beginning FY 2021.

Background

The real estate transfer tax is imposed on the transfer of real estate in the State. The tax is equal to $0.80 per $500 (or any fractional part of $500) of consideration paid as part of or a condition of the property transfer. As examples, the transfer of a $1,200 property would incur a tax of $2.40, while the transfer of a $1.0 million property would incur a tax of $1,600. The tax is paid to the county. Iowa Code section 428A.8 controls the division of the tax revenue. The county retains 17.25% of the tax revenue for deposit in the county general fund. The county remits the remaining 82.75% to the State. The State portion is deposited as follows:

Housing Trust Fund, 30.0%, up to a limit of $3.0 million each fiscal year.
Shelter Assistance Fund, 5.0%.
State General Fund, 65.0%, plus any Housing Trust Fund revenue in excess of $3.0 million. The following table provides a history of real estate transfer tax deposits for the past four fiscal years.

Assumption

Over the past 12 fiscal years (FY 2007 through FY 2019), the average annual rate of growth in real estate transfer tax has equaled 2.1%. That rate of growth is assumed for FY 2020 and future fiscal years.

Fund FY 2016 FY 2017 FY 2018 FY 2019 Housing Trust Fund 3.0$ 3.0$ 3.0$ 3.0$ Shelter Assistance Fund 1.0 1.1 1.2 1.2 State General Fund 16.8 18.6 19.2 19.1 Total 20.8$ 22.7$ 23.4$ 23.3$ Real Estate Transfer Tax Revenue, State Portion

In Millions

Fiscal Impact

Removing the Housing Trust Fund annual $3.0 million real estate tax revenue limit is estimated to increase Housing Trust Fund revenue and reduce net General Fund revenue by the following amounts:

FY 2021 = $4.3 million
FY 2022 = $4.4 million
FY 2023 = $4.6 million
FY 2024 = $4.7 million
FY 2025 = $4.9 million

The annual amounts are projected to increase modestly over time.

Sources

State Accounting System
Legislative Services Agency analysis

Housing Trust Fund, Real Estate Transfer Tax · January 29, 2020
Housing Trust Fund, Real Estate Transfer Tax · January 22, 2020

Reading a fiscal note⁴

Iowa Code it changes

Amends§428A.8

How the Code works⁵

Lobbying

14 for · 0 against · 12 undecided · Who →

Family tree

88th General Assembly

SF 2036Cleared committeeSenate companion HF 2163Cleared committeeHouse companion

Picked up later

SF 10Cleared committee89th GA SF 612Cleared committee89th GA

Earlier and later bills are matched by wording or an identical title.

Similar bills

SF 10 Relating to real estate transfer tax moneys transferred to the housing trust fund
89th General Assembly · In committee
Nearly identical
SF 612 Relating to real estate transfer tax moneys transferred to the housing trust fund
89th General Assembly · Approved by committee
Nearly identical

Matched by wording or an identical title.