If your home has been listed for sale through the summer without procuring a buyer, don’t be surprised about the two new laws that will most likely affect your sale. Homeowners, who will be listing their home for sale in the fall, will most likely be advised by their real estate agents. Of course, I am talking about the increased county recordation tax and the new radon-testing requirement.
Effective September 1, increased county recordation tax will be collected. The rate for the first $500,000 will be $8.90 per $1,000. The rate for any amount exceeding $500,000 will be $13.50 per $1,000. The individual primary residence exemption is also increased from $50,000 to $100,000.
Recordation tax is an excise tax that is collected for the “privilege” of recording an instrument in the land records. Of course, transfer tax is collected when a home is sold, and it is also collected when a mortgage is refinanced.
Effective October 1, radon testing is compulsory for homes that are sold (however, the law lists exemptions). The seller must test, or allow the buyer to test radon levels in the home. The radon test must not be older than one year from the closing date. Both the buyer and seller must receive the radon report. If radon levels are above the EPA recommended action level of 4 picocuries per liter, then an estimate must be obtained from a licensed contractor to reduce the level to 2 picocuries per liter.
Radon is a toxic, radioactive gas that is formed by the natural breakdown of radium. Radon seeks its way to the surface as an odorless, colorless, and tasteless gas. A 1999 National Academy of Sciences report (The Biological Effects of Ionizing Radiation, The Health Effects to Indoor Radon) indicated that radon causes up to 22,000 lung cancer deaths per year. As there are no immediate symptoms of radon exposure, the only way to know if a building has high levels of this gas is to test for it.
Although the radon testing law is well-intentioned, it misses the mark on comprehensive radon testing, education and awareness.
First, the law may unintentionally provide a false sense of security to home buyers. By requiring the test by the sale, it suggests to home buyers that the initial radon test (when the home is purchased) is the only test needed. In fact, the EPA recommends radon testing every two years. Homes with low radon levels may change over time to have increased levels, and vice versa. Additionally, the self-testing conducted by homeowners may not be accurate (or worse, may be intentionally erroneous). Consequentially, home buyers should hire a qualified expert to test the home regardless of home seller-provided test results.
Second, it must be asked as to why only testing is required for single-family home sales? Radon is everywhere. The radon law should have been more comprehensive to also include radon testing every two years for single-family rental units, schools, and public buildings.
And finally, the law should have provided for consumer education much like the EPA lead paint pamphlet (Protect Your Family From Lead In Your Home) that is required for home sales and rentals. Likewise, why not provide to consumers the EPA pamphlet “Home Buyer’s and Seller’s Guide to Radon” (https://www.epa.gov/sites/production/files/2015-05/documents/hmbuygud.pdf)?
Dan Krell is a Realtor® with RE/MAX All Pro in Rockville, MD. You can access more information at www.DanKrell.com.