Could tax break keep locals in Avon?
Vail CO, Colorado
AVON ” A few thousand dollars could make a difference between a family staying in Avon or moving to another home downvalley, says Avon resident William Jacobs.
That’s why he thinks it’s a good idea for the town to add a second exemption to Avon’s real estate transfer tax, an idea that will be voted on by the Town Council in the near future.
“Every bit helps,” Jacobs said.
Anytime real estate changes hands in Avon, a 2-percent tax is imposed. There is a one-time exemption of $160,000 on the sale price for people who make Avon their primary home, which will save a buyer $3,200.
Councilman Dave Dantas said having a first-time exemption is great, but if someone living in Avon wants to buy a new house in Avon ” maybe buy a bigger home for a growing family ” they’re penalized for it. That’s why he wants to add a second exemption and entice people to stay in-town if they want to buy a new home.
“Everybody scrambles for that 10-percent, 20-percent down payment, but the tax, that’s an extra $3,200 you have to have,” Dantas said.
The exemption would only apply to homeowners who earn 95 percent of their income by working in Eagle County.
Other council members are skeptical of how many people would actually stay in Avon because of an added exemption. Councilwoman Tamra Nottingham Underwood said she agreed with the spirit of Dantas’ proposal, but wondered if there were better ways to keep people in town.
If the town were to add a second exemption, the town could lose around $80,000 a year, Dantas said. Money from the transfer tax goes exclusively to capital improvement projects such as building new bike paths.
Town staff did not recommend any changes to the transfer tax. Still, the council ” with some reservations ” asked town staff to come up with a new exemption policy, which the council may or may not approve.
Dantas had also suggested raising the first exemption amount from $160,000 to $320,000, but other councilors and town staff said that would cost too much money.
The transfer tax was a big issue for Dantas when he was campaigning for town council in 2006. Dantas said he hopes it will be approved when it goes to a vote, especially because the council has been working hard to develop an affordable housing policy for the town.
“We’re supporting attainable housing, but we have to put our money where our mouth is,” Dantas said.
Staff Writer Matt Terrell can be reached at 748-2955 or firstname.lastname@example.org.