2022-2023 Legislative Issues Booklet

2022-2023 LEGISLATIVE ISSUES

New Jersey Realtors®

10 Hamilton Avenue, Trenton, NJ 08611 njrealtor.com | 609-341-7100

LEGISLATIVE ISSUES 2022-2023 1 — 2 — 4 — 6 — 8 — 10 — 12 —

A Message From CEO Jarrod C. Grasso State Budget Property Taxes Time of Sale Requirements Risk Reduction Government Transparency First-Time Homebuyer Programs

*There is pending legislation as of printing.

The Voice for Real Estate in New Jersey For more than a century, our association has been at the forefront of issues impacting private property rights and real estate. We advocate on behalf of our more than 60,000 members, but also the almost 9 million residents of our state.

What do we believe? Owning a home or business is the American Dream and essential for the growth of our economy. With more than 60,000 Realtors® in the state of New Jersey, New Jersey Realtors® is the largest trade association advocating for private property rights and homeownership in the state.

New Jersey Realtors® are your friends and neighbors, dedicated to the communities they live and work in. They are professionals, and their businesses are a key part of the economic foundation in New Jersey.

The association also provides the most accurate data available on the New Jersey housing market, broken down by municipality, legislative district, county, and state. When it comes to the housing market and private property rights, New Jersey Realtors® is here as a resource.

We look forward to working with you and hope the information in this booklet will be a valuable point of reference when drafting legislation.

Jarrod C. Grasso, CEO

STATE BUDGET In February or March of each year, the governor proposes a new budget for the next Fiscal Year. The State Legislature must then consider and vote on the proposal before June 30. During this process, New Jersey Realtors® reviews the budget proposal and works with the administration and State Legislature to ensure no new taxes or fees affecting the real estate industry or homeownership are proposed. New Jersey Realtors® works to make homeownership more affordable by opposing new or increased taxes and fees, and advocating for programs beneficial to homeowners and the real estate industry.

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Realty Transfer Fee (RTF) In 1968, the RTF was enacted in New Jersey with the sole purpose of recording deed transfers during a real estate transaction. In the mid-2000’s, the fee increased by nearly 50 percent, which made it more expensive to buy and sell homes and businesses in New Jersey.

In 2018, an RTF increase was proposed, but not adopted, on properties sold for over $1 million from one percent to two percent. If it was enacted, it would have increased taxes on those properties by a minimum of $10,000.

New Jersey Realtors® strongly opposes any RTF increase proposals and believes the State Legislature should instead focus on ways to reduce the fee back to pre-2003 levels. New Jersey Realtors® also remains opposed to any efforts to allow individual municipalities to enact their own RTF.

STATE BUDGET Professional Services Tax The association strongly opposes extending the Sales and Use Tax to commissions earned by real estate professionals, which is already taxed under the state income tax. Double taxing commission payments would equate to a tax increase of over $1,000 on a home sold in New Jersey, making it more expensive for consumers to buy or sell a home.

Seasonal Rental Tax New Jersey Realtors® strongly opposes any legislation that would extend the transient accommodation tax adopted in 2018 to traditional seasonal rentals in New Jersey.

Currently, the transient accommodation tax applies to rentals of less than 90 days rented through online marketplaces.

Extending this tax to apply to traditional seasonal rentals could cost more than $20 million in tax revenue and 2,000 jobs.

At a time when more families are opting to vacation locally, taxing seasonal rentals would be detrimental to New Jersey’s tourism economy.

Real Estate Commission Operating Funds To protect the integrity of New Jersey’s real estate industry and consumers, New Jersey Realtors® believes it is essential the REC maintain a sufficient level of funding.

In order to do so, the State Legislature must ensure funds collected by the commission remain with it. Maintaining funding is especially important since in recent years, the REC has experienced difficulty updating its rules and providing important information to real estate licensees.

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PROPERTY TAXES

New Jersey continues to have the highest property taxes in the United States. For the first time ever, in 2020, the average property tax exceeded $9,000—seven of New Jersey’s 21 counties had average property taxes of over $10,000. While progress has been made in recent years to control property tax increases, there is still work to be done to make New Jersey an affordable place for families to live and retire.

New Jersey Realtors® believes measures to control and reduce property tax increases should be enacted.

While the state property tax deduction was recently increased as a way to offset the State and Local Tax deduction cap, additional measures are still needed.

New Jersey must continue to find ways 4

to reduce the property tax burden.

Comprehensive solutions by the state, county, and local governments to address this issue.

This cap on the SALT deduction comes at a great cost to New Jersey residents.

New Jersey Realtors® and the National Association of Realtors® are working tirelessly with members of Congress to eliminate the cap on the SALT deduction to lighten the tax burden on our residents.

The widespread problem of property taxes will only be solved by the adoption of innovative and comprehensive solutions on the municipal and state levels.

Making the Garden State more affordable will halt the outmigration of young people, attract new residents, and incentivize new businesses to invest our state.

PROPERTY TAXES

Visit njrealtor.com/government-affairs for compiled reports on these exact issues. We encourage policymakers to utilize this data when crafting new measures leading to lower property taxes.

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TIME OF SALE REQUIREMENTS Many proposed time-of-sale requirements, while well-intentioned, will add time to a transaction and make it far more expensive to buy or sell a home in New Jersey.

Fire Extinguishers In prior legislative sessions, legislation has been considered that would amend state law and remove the time-ofsale fire extinguisher mandate. This legislation was passed in the State Legislature but conditionally vetoed by former Gov. Christie.

New Jersey Realtors® believes the presence of a fire extinguisher should not be tied to time-of-sale and believes legislation should be reintroduced and approved repealing this requirement.

Mold Currently no standards exist to determine acceptable or safe levels of 6

mold due to the difficulty in ascertaining whether a mold species is harmful.

New Jersey Realtors® believes the State Legislature should consider a bill, which has been introduced, that would create mold procedures and inspection criteria since it is nearly impossible to determine which species of mold are hazardous and what levels are considered dangerous. *Lead Paint Numerous proposals have been put forward in the State Legislature that would create time-of-sale requirements focused on remediation of lead paint, lead in the water supply, and lead in soil.

Lead paint remediation can cost, on average, $15 per square foot of a pre1978 home, which potentially adds tens of thousands of dollars to the home’s cost while also making it more difficult to sell.

New Jersey Realtors® has advocated for additional funding to address this issue on a larger scale while also avoiding stigmatizing properties.

Existing revenues from the realty transfer fee should be used to create a program to provide funding for lead testing and remediation.

TIME OF SALE REQUIREMENTS

Funding allocated in the FY 2021 state budget should annually go towards the Lead Safe Home Renovation Pilot Program and Single-Family Home Lead Hazard Remediation Fund. Legislation should also be approved that adds a lead in the water supply question to the Consumer Information Disclosure Statement.

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RISK REDUCTION

*Independent Contractors Across the country and in New Jersey, real estate licensees are allowed to be classified as independent contractors, a designation of critical importance to the real estate profession.

The real estate profession has long maintained independent contractor relationships, and in these relationships, real estate brokers oversee their agents, but do so while giving them the discretion they need to best represent their clients. If real estate licensees lost their independent contractor status, it would make it untenable for the industry to continue and professionals to represent consumers buying and selling homes.

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New Jersey Realtors® strongly supports maintaining the independent contractor status so real estate professionals may continue to operate and serve New Jersey home buyers and sellers.

*Consumer Fraud Law New Jersey Realtors® supports legislation amending the state’s consumer fraud law. The amendment ensures agents representing buyers are treated with the same protections as those representing sellers.

Currently, under the consumer fraud law, agents representing sellers are not liable if they unknowingly provide inaccurate property information to a client. The protections provided to sellers’ agents should be extended to those representing a buyer if they can demonstrate they did their due diligence regarding obtaining information about a property.

RISK REDUCTION

New Jersey Realtors® strongly believes the consumer fraud law should be amended to provide equal protections to real estate agents representing buyers and sellers.

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GOVERNMENT TRANSPARENCY New Jersey Realtors® has long supported policies that ensure the public has access to public records and official documents such as public meeting agendas, ordinances, and meeting minutes.

Legislation should continue to be put forward to make it easier to access public records.

By ensuring the public has access, we can be sure they are aware and have the opportunity to be a part of the policies enacted by elected officials. This in turn will lead to good government and tax savings for all New Jersey residents.

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FLOOD INSURANCE New Jersey Realtors® believes in the continuation of the National Flood Insurance Program is crucial to a strong real estate market in New Jersey.

Given the large numbers of rivers, as well as the proximity to the Atlantic Ocean, it is vital the NFIP be reauthorized on a long-term basis, with reforms, to make it more affordable.

While the federal government continues to debate a long-term reauthorization of the NFIP, the State Legislature should look at policies to make flood insurance more affordable on the state level. The Department of Banking and Insurance and Department of Environmental Protection can also play a larger role to ensure policies are enacted to protect homes in flood zones and make flood insurance more affordable.

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FIRST-TIME HOMEBUYER PROGRAMS New Jersey Realtors® is in strong support of legislation which establishes a First-Time Home Buyer Savings Account Program in New Jersey.

This program would help those interested in purchasing a home for the first time to build up the savings they would need to purchase their first home.

Assistance Program to help New Jerseyans achieve the American Dream of purchasing their own home.

By supporting these and other programs, the State Legislature will show its support for policies that will increase diversity in homeownership, a position strongly supported by New Jersey Realtors®.

We believe the State should be enacting policies that will make it By providing tax benefits to encourage more affordable and easier to expand those to set aside funds in a savings homeownership opportunities across account that would be used to buy a New Jersey, making us a model across first-time home, the State would provide the nation as a State working to support a necessary tool that would assist New diversity in homeownership.

Jerseyans in having the funds they need to purchase their first home.

The State Legislature should also continue to provide funds annually through the State Budget for the First-Time Homebuyer Down Payment 12

GOVERNMENT AFFAIRS STAFF

Douglas M. Tomson Vice President of Government Affairs dtomson@njrealtor.com, 609-341-7120

Catherine Best Director of Government Affairs cbest@njrealtor.com, 609-341-7105

Bruce Shapiro Director of RPAC and Regulatory Affairs bshapiro@njrealtor.com, 609-341-7113

Matthew Lowery Government Affairs Coordinator mlowery@njrealtor.com, 609-341-7106

Thomas Duke Government Affairs Coordinator tduke@njrealtor.com, 609-341-7109

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