Avon homebuyer tax relief coming online
After months of deliberation, the Avon Town Council’s effort to offer another tax exemption to local homebuyers will take effect on Dec. 19.
If you’re a local working person buying a home for $700,000 or less in Avon, that means you will be able to subtract $240,000 off your purchase price when it comes time to pay your 2% real estate transfer tax to the town. The exemption was initially adopted at $80,000 in 1989, and in 2002 it was increased to $160,000, where it has remained since.
Avon started discussing the transfer tax exemption in July, and by August, the council had approved the first reading of an ordinance that would increase the exemption level to $400,000.
But in examining the idea for a second reading, which would make it official, council members had second thoughts about the $400,000 level.
‘That CIP money’
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Avon’s 2% real estate transfer tax is double that of Vail, Minturn, Eagle Ranch and Gypsum, and during the 2018 council election campaign, Chico Thuon — en route to receiving the most votes in the election — said he felt that the tax was gouging for families that move to Avon.
“It’s like having an extra Realtor sitting at the table,” said Thuon, who is himself a real estate agent.
The money Avon collects from the real estate transfer tax is used to pay for capital improvement projects in town. Debt obligations of more than $1 million per year are paid off through real estate transfer taxes, including the Avon Police Station and the town’s regional transit facility.
The tax is estimated, conservatively, to generate about $2.5 million per year.
Upping the exemption level to $400,000 would have impacted the fund by more than $300,000, assuming the town continues to process an average of 65 to 70 exemptions per year.
“I really feel like the stuff we can do with that CIP money, it can’t be replaced,” Mayor Sarah Smith Hymes said during the town’s Sept. 10 meeting.
Approved and applauded
In coming back to the council on Nov. 19 for a second reading, Town Attorney Eric Heil presented a more modest increase to the exemption, going to $240,000 rather than the $400,000 that was passed on first reading.
The first reading also contained no price cap for homes, meaning a multi-million dollar homebuyer could still qualify for the exemption, prompting council member Scott Prince to vote against it.
In bringing the ordinance back for a second reading, a price cap of $700,000 was added. It received unanimous approval from the council, along with a round of applause from the mayor.
“Excellent work,” she said to town staff.