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Wednesday, January 24, 2024, Kingston City Hall. (Tania Barriklo/Daily Freeman)
KINGSTON, N.Y. — The city is considering a real estate transfer tax to fund a number of initiatives in its yet-to-be-adopted 2023 Community Preservation Plan, including spatial preservation and historic preservation.
Imposing a tax on buyers of real estate transactions that exceed the median home sales price in Ulster County, Julie Noble, the city’s environmental education and sustainability coordinator, said in a presentation at the City Council Code Committee meeting in March. He shared his suggestion. That number increased from $325,000 in 2021 and $280,000 in 2020 to $350,000 in 2022, she said.
“If a home or parcel of land in the City of Kingston is sold for less than $350,000, the tax will not apply,” she said. “If it sold for $351,000, the sales tax would be $1; if it sold for $450,000, the sales tax would be $100,000.”
Noble said the tax primarily affects homebuyers of luxury homes in the area.
He said he came to the meeting strictly to gauge interest among council members, adding that he plans to return to the Legislative Council meeting on April 17 for further discussion on the tax. Lawmakers seemed positive about the plan.
Funds from the tax could be used for several initiatives. Noble said these could include preserving space, purchasing the land outright, conversational easements and managing the land only with willing landowners. These efforts do not give the city the authority to seize property, she added.
Due to state regulations, the money raised cannot be used for infrastructure such as housing, roads or sewers, Noble said. However, she said it can also be used for off-road trails.
Noble said the Kingston Land Trust is conducting a telephone survey of the community to gauge interest in the proposal, and one of the key questions is what percentage of the tax would be. . City council members questioned the use of telephone polls, pointing out that most people only answer calls to numbers they know because the calls are fraudulent.
“I think it would be great to have a link on the city’s website,” said Councilwoman Sara Pasti, D-1st Ward. She added that similar taxes already exist locally in Marbletown, Gardiner, New Paltz and Red Hook. Tax rates vary by community, ranging from 2% in Red Hook to 1.5% in New Paltz. Gardiner, 1.25%. and Marbletown was at 1%, she said.
Noble said the city inventories all properties throughout the city and gives them one or more scores based on natural resources, cultural resources and historic preservation. “Does it have historical value?” she said. “Does it have agricultural value?” “Does it have value as a natural resource?”
Noble said properties with high scores may be eligible for historic preservation or conservation funding. She reiterated that participation is strictly at the choice of the landowner.
Pasti said that would make him more likely to support community preservation plans and real estate transfer taxes.
Many hurdles need to be cleared in order to realize this tax plan. Noble said the first step in implementing the program is to adopt an existing community protection plan and review it under the state Environmental Quality Review Act.
By adopting a community preservation plan, the city would not be bound by real estate transfer taxes, she said. Noble added that the second part is establishing a community preservation fund and the necessary city-run advisory committee to oversee that money.
Assemblyman Robert Dennison, D-6th District, questioned how the committee would function. Noble said the board will be comprised of both municipal and non-municipal members. He said any deal would still require Common Council approval.
Noble said the third step is for the City Council to approve a real estate transfer tax. Finally, the law must be approved by voters in a referendum, which could be implemented as early as this November’s election.
“This is probably a good time,” Pasti said, noting that this is a presidential election year.
He said the city could set up a community preservation fund even if the real estate transfer tax fails, but would need to explore alternative funding methods, such as grants.
The legislation must be submitted to the Ulster County Board of Elections by Aug. 2 for the real estate tax to appear on the ballot.
After Noble’s presentation, Dennison said he was surprised that the Common Council had not yet formally adopted a community preservation plan.
Kingston Land Trust Board Chairman Michael Drillinger said the nonprofit group will advocate throughout the process, starting in early May and running through the election period.
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