PITTSBURGH POST-GAZETTE: By January, buyers of some of Downtown’s biggest skyscrapers no longer will be able to exploit a loophole in state law to avoid paying deed transfer taxes that in some cases cost the city and the school district millions of dollars in revenue…
Gov. Tom Corbett earlier this month signed into law an amendment to the state tax code that prevents real estate buyers from using so-called “89-11” transactions to get around the tax…
State Sen. Jim Ferlo, D-Highland Park, spearheaded the amendment to close the loophole after the group that bought the U.S. Steel Tower last year for $250 million employed the technique and avoided $10 million in deed transfer taxes to the city, the Pittsburgh Public Schools, and state. In an “89-11” transaction, a buyer, instead of purchasing a property outright, will acquire 89 percent of the interest in the company that owns it. After three years, the buyer will purchase the other 11 percent. Real estate deals are now subject to the deed transfer tax only if 90 percent or more of the interest is transferred within three years… (more)
