Tracking Recovery continued

Real Estate Transfer Tax Collections

This statistic is not often reported but affords another indicator of county fiscal health. The website provides the following description of the variable. "Real estate transfer tax collections are obtained from monthly reports posted on the Tennessee Department of Revenue website. The tax is 0.37% of the value of a real estate transaction ($0.37 per $100 value). Thus, the taxes collected can change due to a change in the number of transactions or a change in the average value of property transferred. Since collections can be volatile, we report a trend that smooths out the short-term peaks and dips."

Figure 7 below shows the collections trend for Shelby County, which has been particularly hard hit in the real estate market. The collections fell sharply in the early stages of the recession and then showed a rebound, almost certainly associated with the first-time-homebuyer tax credit initiated in 2009, only to fall again through early 2011. The good news is that the trend is once again rising.

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Fig. 7. Shelby County Real Estate Tax Collections Trend

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