Bills › 88th General Assembly
Relating to the deposit and transfer of real estate transfer tax receipts, and including effective date provisions
Topics:Housing & propertyTaxes
Where it is now
- Done: IntroducedFebruary 20, 2019
- Done: SubcommitteeFebruary 21, 2019
- 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
This bill relates to the deposit and transfer of receipts paid to the treasurer of state from the real estate transfer tax collected by the county recorders. Under current law, percent of the receipts are deposited in the general fund, percent of the receipts are transferred to the housing trust fund, and percent are transferred to the shelter assistance fund. The bill changes the distribution effective with the fiscal year beginning July 1, 2019, with percent of the receipts deposited in the general fund, percent of the receipts transferred to the housing trust fund, and percent transferred to the shelter assistance fund.
Read the full explanation
Under current law, the amount of money transferred to the housing trust fund in any one fiscal year is limited to $3 million. Any money that otherwise would be transferred to the housing trust fund in excess of that amount is deposited in the general fund of the state. The bill removes the limitation on the amount of money that may be transferred to the housing trust fund. The bill takes effect upon enactment.
Senate subcommittee
Named February 21, 2019. It hasn’t reported yet.
- Sen. Randy Feenstra R
- Sen. R. Smith
- Sen. Zach Wahls DEmail
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 Senate File 325 changes how Real Estate Transfer Tax revenue is divided among different state funds and removes the yearly limit on money sent to the Housing Trust Fund. This change is projected to reduce State General Fund revenue while increasing revenue for the Housing Trust Fund and the Shelter Assistance Fund. For example, in fiscal year 2025, the State General Fund is estimated to decrease by $8.7 million, while the Housing Trust Fund increases by $7.2 million and the Shelter Assistance Fund increases by $1.5 million.2
Read the fiscal note
Description
Senate File 325 makes changes to the distribution of Real Estate Transfer Tax revenue. The change is effective July 1, 2019.
Background
The Real Estate Transfer Tax is imposed in Iowa Code chapter 428A. The tax applies to all transfers of real estate where the market value of the transferred property exceeds $500. The tax rate is $0.80 for each (or fractional part of) $500 of the sales price. The tax is collected by the county recorder. The county retains 17.25% of the tax and remits the remaining 82.75% to the State Treasurer. Current law distributes the State share of the tax revenue as follows:
- State General Fund: 65.0%.
- Shelter Assistance Fund: 5.0%.
- Housing Trust Fund: 30.0%, up to a maximum of $3.0 million per year.
- General Fund: Any remaining revenue.
The Bill changes the distribution to 55.0% to the State General Fund; 35.0% to the Housing Trust Fund; and 10.0% to the Shelter Assistance Fund. The limitation on the maximum amount that may be transferred to the Housing Trust Fund is removed.
Assumption
The State portion of Real Estate Transfer Tax revenue equaled $17,127,264 for FY 2008 and $23,378,757 for FY 2018. The average annual growth rate over the 10-year period was 3.16%. That growth rate is assumed for future fiscal years.
Fiscal Impact
The proposed change in the distribution of Real Estate Transfer Tax revenue is projected to reduce State General Fund revenue and increase Housing Trust Fund and Shelter Assistance Fund revenue by the amounts listed in the following table. The revenue increases and decreases continue in future fiscal years.
Sources
- State accounting records
- Legislative Services Agency analysis
- Real Estate Transfer Tax · March 25, 2019