SENATE BILL REPORT

SB 5400

BYSenators Gaspard, Bluechel and Bauer

Exempting from real estate excise tax transfers of property to the secured party for relief from the debt.

Senate Committee on Ways & Means

Senate Hearing Date(s):January 29, 1987

Senate Staff:William Bafus (786-7437)

AS OF JANUARY 28, 1987

BACKGROUND:

At present, the assumption of the balance due on an obligation secured by a mortgage or deed in lieu of forfeiture is exempt from real estate excise taxation when no other payment is received by the original borrower.  If, in the same circumstances, the holder of the obligation required payment in full and refinancing, the transfer would not be treated as exempt and would be subject to the tax.

SUMMARY:

Transfers where no other consideration passes to the vendor beyond relief from a debt are exempt from the real estate excise tax.

Revenue:    yes

Fiscal Note:      requested