The New Hampshire Senate
Republican Majority Office
Boutin bill to protect leases from real estate taxes receives broad bipartisan support
(CONCORD) This morning, Senator David Boutin (R-Hooksett) introduced legislation protecting commercial leases from the Real Estate Transfer Tax, which would reverse the recent decision made by the Hassan Administration imposing the tax without legislative approval. The Senate Ways and Means Committee held a public hearing on SB 232 this morning, and received broad support for Senator Boutin’s bill.
“The Real Estate Transfer Tax was never meant to apply to commercial leases. The Legislature applied the tax to leases of 99 years or longer, but the DRA has decided to ignore the letter of the law in order to collect more money from New Hampshire businesses,” Boutin said.
Last year, the Hassan Administration requested a change in Administrative Rules to allow the Department of Revenue Administration to collect the Real Estate Transfer Tax on commercial ground leases of 30 years. When confronted with opposition by Senator Boutin and others, DRA withdrew the request, and insisted it had the authority to collect the tax without legislative approval.
“The only people with the power to impose new taxes on the families and businesses of New Hampshire are the people they elect,” Boutin continued. “The Real Estate Transfer Tax should never have been expanded without legislative approval, and I look forward to restoring the tax status of commercial leases with this bill.”
NH RSA 78-B authorizes the Real Estate Transfer Tax of $0.75 per $100 of fair market value “imposed upon the sale, granting and transfer of real estate and any interest therein including transfers by operation of law.” The tax is paid by both the buyer and the seller, resulting in a total tax rate of 1.5%.
Administrative Rule Part Rev 802.01(f) applies RETT on leases of 99 years or longer, but do not authorize RETT on shorter leases. The Hassan Administration has sought a change in Administrative Rules to allow RETT on “ground lease transfers,” but delayed its request twice in the face of criticism from the Committee. The Hassan Administration has now withdrawn its request, claiming that “the taxability of ground leases exists currently under New Hampshire law.”
Administrative Rules Chapter Rev 800- Transfer of Real Property