Written by Although sales taxes, property taxes and income taxes get all the attention, the real estate transfer tax is another relatively recent tax that is used to fund local government at the county level.
Prior to 1967, if you sold your home in the state of Ohio, you got to keep all of the proceeds–minus what you paid the realtor and the title company or attorney who handled the transfer.
But in 1967, the state of Ohio established a 1 mill real estate transfer tax that was required to be paid by the seller to the state of Ohio upon the sale of real estate.
That 1 mill tax equated to $1.00 for every $1,000.00 of the sale price. If you sold your home for $20,000.00, you had to pay the state of Ohio $20.00.
That may sound ridiculous, given today’s inflated market prices, but back in 1966, you could buy a newer home in Fairpark for $12,500.00.
When the state created the real estate transfer tax, it also allowed for county governments to establish “piggyback” transfer taxes of an additional 3 mills.
Quick to try and grab this extra money, so that local government could expand in scope and scale, Marion County Commissioners (John Isler-Dem, Paul W Augenstein-Dem & Howard McCurdy-Rep) passed a resolution to max out the real estate transfer tax at $4.00 per $1,000.00 in sale price.
To their credit, the commissioners didn’t hide their intentions for the extra dough. They made it known that they wanted to use the money to give all county employees pay increases and to hire additional employees.
Led by future commissioner Jay M Howser, the Marion Board of Realtors (MBOR) and the Marion Building Association waged a campaign to oppose the new tax. They gathered over 3,000 signatures and had a repeal initiative placed on the ballot.
Voters soundly defeated the transfer tax during the November 1968 election. It was absolutely annihilated 19,148 (81.57%) to 4,327 (19.43%) and remains one of the biggest rebukes of an action by government in Marion County’s history. All 83 precincts in Marion County voted to repeal the tax.
After that defeat, Marion County commissioners learned their lesson–at least for a few years. Marion County voters did not want big government and the big spending associated with big government.
During the high inflation and economic challenges of the Carter Administration, county budgets got a bit stretched. In 1981, commissioners reconsidered a local transfer tax, but after meeting with the MBOR, who still opposed it, they decided against it.
The effort was renewed once again in 1992. Marion County Commissioners (Ruth Kelley-Dem, M. Kirk Moreland-Dem & John W Watkins-Rep) passed a resolution establishing a 1 mill county transfer tax in order to fund the planned Marion Community Area New Development Organization (Marion CAN DO!).
The MBOR and other opponents of the previous attempts to create the new tax did not put forth opposition, since the tax only increased by 1 mill–instead of 3 mills–and it was being used to support economic development in the county, instead of giving county employees pay raises.
In retrospect, however, Marion County got a tax increase but didn’t really get much in the way of economic development as a result.
Marion County’s gross transfer tax stayed at 2 mills for quite a few years. There was discussion of increasing it by another 2 mills in 2005 and 2012, but it was never acted upon.
However, in 2018, Marion County Commissioners (Ken Stiverson-Rep, Kerr Murray-Rep & Andy Appelfeller-Rep) passed a resolution to increase the transfer tax to the maximum allowed by law of 4 mills.
Interestingly, the proposal came to the commissioners from the Marion Area Chamber of Commerce, who pitched it as a way to provide funding to the Marion County Land Reutilization Corporation (aka the Land Bank).
Under the chamber’s proposal, the additional money would be used by the Land Bank to demolish, rehabilitate and maintain blighted properties around the county.
The MBOR supported the plan to use the funds for the Land Bank and made it known that its support was conditioned on the use of the funds for that purpose and that purpose alone.
Marion County Sheriff Tim Bailey (Dem), on the other hand, wanted the extra funds to be applied towards the construction of a new sheriff’s office.
In the end, the tax increase was imposed but the money went into the county’s General Fund. Commissioners failed to commit the funds to the Land Bank or to cite a specific purpose or destination for the funds, committing only to move funds to the Land Bank on an as-needed basis.
If you sell your home today, you’re certainly paying a hefty chunk of change to the county.
With price inflation, if your home sells for $250,000.00, you’re handing over $1,000.00 to the government.