Avon council passes tax relief measure for local homebuyers
Exemption, if passed on second reading, will be available to any person working at least 30 hours per week in Eagle County
The Avon Town Council is ready to reduce taxes for local homebuyers. On Tuesday, the council approved, on first reading, an increase on the exemption amount purchasers can seek on transfer taxes levied by the town.
Avon’s 2% real estate transfer tax is currently the highest of any town in Eagle County. By upping the exemption on that tax from $160,000 to $400,000 for local buyers, the town council expressed a desire to provide relief for working people who want to purchase a home in Avon.
Of the approximately $2.5 million in annual funds the real estate transfer tax generates in Avon, just over one million is used for debt obligations, including the Avon Police Station, the regional transit facility in town, and others. Another $250,000 is transferred to the general fund, and the remaining $1.2 million or so is used as discretionary funds
The exemption, if passed on second reading, will be available to any person working at least 30 hours per week in or from Eagle County — if they use the property as their primary residence for at least three years. People who meet those conditions will be allowed to take $400,000 off the purchase price of their home when the transfer taxes are assessed.
The fact that purchasers can use the exemption on any home purchased in Avon — even the multi-million dollar variety — prompted council member Scott Prince to vote against it.
Prince said while he supported the transfer tax exemption increase, “I oppose an unlimited cap on the property price,” he said. “Because that’s not achieving to serve the market that I think we should be serving.”
The remaining council members voted in favor of the idea, which requires a second reading on Sept. 10 before it can be approved.
A robust discussion surrounded the questions of who should be eligible for the exemption, what the amount of the increased exemption should be, what property is eligible, and what the minimum period to hold the property as primary residence should be.
While council member Jake Wolf wanted the exemption amount lifted to $420,000, council member Amy Phillips said she preferred an even $400,000.
“The reason I like $400,000 is that is about what it costs you to get into a two-bedroom at Avon Crossing right now,” Phillips said.
Phillips is a real estate broker for Keller Williams.
“I want to give that 1% advantage to the negotiations for the homebuyer that’s competing for the property with the part-timers from Denver and elsewhere,” Phillips said. “Right now the migration from Avon Crossing from people that are buying and living in the property — originally it was all owner-occupied, about 10 years ago it was about 50% owner-occupied, and now less than one out of four annual sales is likely to be owner-occupied. And I’d like to get a buyer that will edge up on the part-timer.”
Public hearing Sept. 10
In discussing the matter in July and again on Tuesday, the town council has spent hours talking about how to facilitate transfer tax relief for homebuyers in Avon. The issue came up during the 2018 town council campaign, as pointed out by council members Chico Thuon and Tamra Underwood on Tuesday, and in holding a public hearing on Sept. 10, council members are eager to hear what the community thinks of the idea.
Tuesday’s discussion was originally scheduled for August 15, but that meeting went unexpectedly long and a motion passed to continue the item at that time. Tuesday’s meeting was also running long, and by the time the council got to the transfer tax discussion at about 8:30 p.m. (the agenda listed the estimated start time at 7:30 p.m.), the room was empty.
“This topic was a major issue during our last election, and we have nobody here to provide public input to help us ensure that we’re doing the right thing,” Underwood said.
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