Council Modifies Real Estate Transfer Tax

Looking for ways to help Highland Park residents remain in their homes and the community, the took direct action to modify enforcement of the last Monday and agreed to discuss additional opportunities to help citizens. 

Any time a change is made in the title to property in Highland Park, the seller must pay the city a one-time tax of $5 for every $1000 of value, though there are some exceptions, like a homeowner refinancing a mortgage. 

'Just for the bank'

Gayle Weinberg Kalmin told the Council at its last meeting how she had to pay a transfer tax twice. She was charged once when she added her father to the title and again when he was removed 18 months later. No money was exchanged and she never moved. 

Kalmin explained how the holder of the mortgage on her home wanted additional security, so she made her father a co-owner of her house. When the bank decided it was no longer necessary 18 months later, she took him off. City staff charged her both times based on the amount of the mortgage. 

“A transfer means from one person to another with consideration,” Kalmin said. “Nothing changed. I stayed in my house. This was just for the bank.” 

Ready to make a change

The Council agreed to study the issue and came to last Monday’s meeting ready to make a change. City Council members directed to prepare an amendment to the law so no one will have a similar burden again. 

At the time Kalmin was dealing with her transfer tax issue, Highland Park offered rebate to residents who paid a transfer tax and remained in Highland Park, something Kalmin was unable to take advantage. 

The Council is considering reinstatement of the rebate as part of its ongoing discussions at it moves toward approving the 2012 budget in December. The policy was suspended in 2011. A change will reduce city revenue. The reduction will vary by real estate sales volume according to . 

The amount was approximately $26,000 in 2010 and $23,000 in 2009, according Holleb. After the meeting, Holleb said city staff would ask the Council whether it wanted to make it retroactive for 2011. 

“We cannot give an exact amount because it depends on how much real estate is sold,” Holleb said. “We would also ask the Council to consider whether it wanted to make the rebate retroactive.” 

The issue of a retroactive rebate was not discussed at the meeting.

'Problematic' real estate market 

and were willing to make the change immediately while others wanted to know exactly how much money it would cost the City and what cuts might be necessary. 

“It’s the least we can do,” Naftzger said. “This down real estate market has been problematic. The market has had a lot of consequences.” 

Councilmen , , and wanted more information from Holleb before making a decision. 

“We would have to replace this or cut more,” Mandel said. 

Kaufman and Frank specifically expressed a desire to know how much income the City was foregoing before making a decision. Kirsch was less concerned.

“We have a number. It’s $23,000,” Kirsch said. “The net effect is creating a less affordable home. Is this tax appropriate in today’s environment? If we want people to stay here we should do this much.” 

Promoting one Highland Park

The Council also discussed potential changes to the Business and Economic Development Commission (BEDC). wants to make it more representative of all constituencies in the Highland Park business community. 

Rotering wants to members from the real estate, retail, restaurant, automobile, legal and finance communities among others to sit on BEDC. She also wants recommendations made to the City Council benefitting not only the central business districts but all commercial areas. 

“We want one brand, one Highland Park,” Rotering said. “At the end of the day the goal is to provide organization and resources to help our businesses. We all want to promote one Highland Park.”