Massachusetts communities, including Boston, Somerville, and Nantucket, are teaming up to encourage legislation to tax some real estate deals and use the money to strengthen affordable housing.
The cities each have different petitions before the legislature. At the same time, a proposal would allow municipalities to levy a tax of up to 2% without requiring legislative approval.
Proponents of the new tax include Ken Beaugrand of the Nantucket Association of Real Estate Brokers. While Nantucket real estate agents could be the outliers in helping a transfer tax, Beaugrand says the island’s housing crisis is so severe that even realtors are pushing for the measure.
“Real estate agents on the island recognize that in order to have a vibrant, ongoing community, you need people to be able to live there,” said Beaugrand.
The new legislative proposal is touted as a “compromise” by the sponsors of various local tax bills for option transfer taxes and by communities petitioning to transfer taxes home. This would allow taxes on real estate transactions above the national average sales price for single family homes. In Boston’s house rules petition, the tax would only be levied on deals over $ 2 million.
The proposed tax is central to Marty Walsh’s plan to invest $ 500 million in affordable housing over five years. Now Brookline, Concord and Cambridge are examining how the new revenue streams could impact their affordable housing strategies.
One of the bill’s sponsors is Rep. Mike Connolly of Cambridge and Somerville. Pointing out extremely lucrative real estate deals stemming from the immense demand for property in the area, he says it is only fair that those who benefit most should do their part on the housing front.
“What you are seeing is hundreds of millions of dollars in value being gained from our communities,” Connolly said. “… Couldn’t we just capture a tiny fraction of it?”
Greg Vasil, CEO and president of the Greater Boston Real Estate Board, says his sector shouldn’t be singled out to address the housing shortage in the area.
“If it really is [a housing crisis] and we believe that we should all pay in some way – everyone who lives here should pay for it, ”said Vasil.
Theresa Hatton, CEO of the Massachusetts Association of Realtors, says the state would only exacerbate the problem while the state is in the midst of an affordability crisis.
“A home sales tax will add thousands of dollars to the final home price for many,” Hatton said in a statement. “This increases the barrier to home ownership that many families already face due to the high cost of owning a home.” Living in Massachusetts. “
The petitions on municipal house rules take different approaches to the fee. Nantucket’s bill would have the seller pay half a percent with the first $ 2 million exempt from the sale price. At Concord, the buyer would pay 1% of the portion of the purchase price over $ 600,000.
Rep. Dylan Fernandes, who tabled a bill last year that provided a transfer fee for sales above $ 1 million, said the group had designed its plan with high-priced homes in mind, but chose the state median as the threshold to use it the option to enable this would be available to communities that like the idea but don’t have many million dollar homes. He said he expected interested municipalities to set higher thresholds, like the $ 2 million proposed in Boston.
“We recognize that there are 351 very different cities in the state,” the Falmouth Democrat said in an interview with the State House News Service. “All of them are for the most part in some kind of housing shortage, but they may look very different in terms of their location. That’s why we chose the middle selling price.”
With coverage from the State House News Service