Senate committee narrows bill to exclude buyer-paid intermediary fees from property valuation

Amelia, staff to the Senate Assessment and Taxation Committee, told members that Senate Bill 332 would exclude buyer’s premiums paid at auction from the sale price used in the real estate sales validation questionnaire and for property tax valuation.

Senator Francisco raised a substantive concern that excluding buyer-paid intermediary charges could understate a property’s sale price, noting, “the value of a property is how much you had to pay for it” and that removing those charges could alter the taxable value. Amelia and other members said the committee had a handout proposing broader language.

The tentative amendment replaced a specific reference to auction premiums with language addressing “third party intermediary premiums, charges, commissions, or fees that are charged to and paid by a buyer for services rendered to facilitate a real estate sale transaction,” and required that such charges be separately stated in writing and not received by the seller, Amelia explained.

Senator Schallenberger said the amendment captured buyer-paid agent fees and clarified it applied only to fees paid by buyers, not seller-paid commissions. After brief discussion, Schallenberger moved adoption of the amendment; Senator Owens seconded. The committee approved the amendment by voice vote and then, on a subsequent motion by Owens and seconded by Schallenberger, voted to pass SB 332 as amended to the full Senate.

The committee recorded the actions as voice votes; no roll-call tally was taken. The amendment and passage change how counties will treat buyer-paid intermediary fees when comparing sale price to appraised value, pending action by the full Senate.