HB 647 - Intangible tax; exempt notes secured by private residence

Georgia House of Representatives - 1995/1996 Sessions

HB 647 - Intangible tax; exempt notes secured by private residence

Page Numbers - 1/ 2
Code Sections - 48-6-65.1
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House Comm: W&M / Senate Comm: / House Vote: Yeas Nays Senate Vote: Yeas Nays ---------------------------------------- House Action Senate ---------------------------------------- 2/8/95 Read 1st Time 2/9/95 Read 2nd Time ---------------------------------------- Code Sections amended:
HB 647 LC 19 2208 A BILL TO BE ENTITLED AN ACT 1- 1 To amend Chapter 6 of Title 48 of the Official Code of 1- 2 Georgia Annotated, relating to taxation of intangibles, so 1- 3 as to provide for legislative findings; to provide a 1- 4 definition; to provide for an exemption from intangible 1- 5 taxation of notes which are secured by the primary residence 1- 6 of the borrower; to repeal conflicting laws; and for other 1- 7 purposes. 1- 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: SECTION 1. 1- 9 Chapter 6 of Title 48 of the Official Code of Georgia 1-10 Annotated, relating to taxation of intangibles, is amended 1-11 by adding immediately following Code Section 48-6-65 a new 1-12 Code Section 48-6-65.1 to read as follows: 1-13 "48-6-65.1. (Index) 1-14 (a) The General Assembly finds that it is the public 1-15 policy of this state to foster home ownership for the 1-16 citizens of this state. Home ownership not only promotes 1-17 a stable environment for our people to work and raise 1-18 their families, but the development, construction, sale, 1-19 financing, and refinancing of homes contributes 1-20 significantly to the economy of this state and region. 1-21 The General Assembly further finds that when Chapter 6 of 1-22 Title 48 was enacted it was intended to tax intangibles 1-23 and to be a tax on the owner of the intangibles. In the 1-24 case of notes secured by the borrower's primary residence, 1-25 this tax has been routinely and universally shifted by the 1-26 owner of the intangible to the homeowner as a part of 1-27 closing costs which the home mortgage business charges the 1-28 borrower. The homeowner not only pays this tax at the 1-29 time he or she borrows money to purchase the home, but 1-30 also at each time the home mortgage is refinanced. The 1-31 current exemption on loans refinancing current debt 1-32 provided by Code Section 48-6-65 is woefully inadequate in 1-33 that it exempts refinancing where the new lender is the -1- (Index) LC 19 2208 2- 1 same lender as the original lender and the original loan 2- 2 has never been assigned. The nature of the home lending 2- 3 business is such now that most home loans are sold and 2- 4 transferred by the originating lender so that few 2- 5 homeowners could avail themselves of that exemption. 2- 6 Thus, intangible taxes on notes which are secured by 2- 7 primary residences prove a hindrance to home ownership and 2- 8 it is in the best interests of the state and the economy 2- 9 of the state to exempt certain residential transactions 2-10 from the taxes imposed by this chapter. 2-11 (b) As used in this Code section, the term 'primary 2-12 residence' means that dwelling which is the principal 2-13 place of abode of the borrower and to which the borrower 2-14 is or will be entitled to a homestead exemption as 2-15 provided in Code Section 48-5-44. 2-16 (c) No tax shall be collected on an instrument which 2-17 conveys an interest in the primary residence of the 2-18 borrower as security for a note which is secured by real 2-19 estate if the instrument bears on its face a statement of 2-20 the borrower or grantor that at the time of execution of 2-21 the instrument he or she currently occupies or intends to 2-22 occupy within 120 days the real estate described therein 2-23 as his or her residence and homestead." SECTION 2. 2-24 All laws and parts of laws in conflict with this Act are 2-25 repealed. -2- (Index)

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