The establishment of a land transfer tax, a move motivated by the need to address Nassau County's $300 million deficit, has alarmed county homeowners and realtors alike. The effect of the tax on the real estate industry in the county and the ability and desire of homeowners to come to or stay in Nassau County has yet to be determined. The tax is expected to generate $50-60 million annually for the county.

The tax, proposed several months ago by County Executive Thomas Gulotta, is a one-percent charge on real estate transfers of over $500. It is feared that this added expense to selling a home will retard the current healthy real estate market by dissuading homeowners from selling and turning prospective homeowners to buy elsewhere.

"There are a lot of buyers, but there are not a lot of houses available right now," said Charles Montana, vice president of Montana Associates, a real estate firm in Hicksville. "This is going to slow down the listings. It is just another reason for people not to sell their homes."

"Many people will simply not sell their homes, thus hurting the real estate market and bringing in less revenue than forecast," wrote Thomas Sobczak, an angry Westbury resident decrying the republican initiative.

Joyce Jurgensen, a broker associate at Coldwell Banker Sammis in Hicksville, indicated that the tax will help prevent a healthy real estate market from burning out. Several factors over the past five years, which include a healthy economy and low interest rates, have contributed to a strong house market where there are more buyers than sellers. She states that this attractive climate would eventually entice more and more homeowners to sell and subsequently flood the market, as it did in the late 1980's. Home prices would subsequently decline.

"In one way I feel it is going to end up being good because the market was getting so high. I was afraid we were going to crash again," said Jurgensen. "I think that this tax will keep many people from putting their houses on the market, which will contribute to keeping the supply low.

Despite the fact that some feel the tax might actually lend itself to stabilizing prices in the cyclical home sales market, others have stated that any gains made in sustained property value could be outweighed by the strain it puts on the individual homeowner or buyer.

"You may be getting more money for your house but are you really coming away with more?" said Montana. "I think people are really going to question that [when looking to sell]."

"Anyone who now wants to "trade-up" (usually young, growing families) or "trade-down" (usually senior citizens who want more affordable housing or wish to pass their homes on to their children) will now lose at least one percent of the value they had," said Sobczak.

Montana stated that a man selling a house in a middle class community like Levittown, and who is interested in buying a home in a community like Syosset, would be dissuaded in doing so because of the tax he will directly be responsible for in the sale of his own home and indirectly responsible for in the purchase of his new home.

"This homeowner looks at this and says this is a lot in extra taxes that I am directly or indirectly going to pay, so I will stay in Levittown. I will improve my house and stay here," said Montana. "That is how I think it is going to affect the market."

He added that the tax will undoubtedly make it harder for young couples looking to purchase their first home. These new homeowners, as well as other prospective homeowners could become discouraged from buying a home in Nassau and look more favorably on western Suffolk communities, like Huntington and the Suffolk section of Farmingdale, where there is no transfer tax.