Boston and Nantucket join call for property taxes to boost affordable housing
Massachusetts communities, including Boston, Somerville and Nantucket, are joining forces to push the legislature to allow them to tax certain real estate transactions and use the money to bolster affordable housing.
Cities and towns each have different bylaw petitions before lawmakers. Meanwhile, a proposal would allow communities to assess a tax of up to 2% without needing approval from lawmakers.
Among those advocating the new tax is Ken Beaugrand of the Nantucket Association of Real Estate Brokers. While Nantucket realtors might be the outlier in supporting a transfer tax, Beaugrand says the housing crisis is so bad on the island that even agents are pushing for the measure.
“Realtors on the island recognize that in order to be able to have a vibrant and continuous community, you have to be able to make sure people can live there,” Beaugrand said.
The new legislative proposal is being touted as a “compromise” by sponsors of various local option transfer tax bills and communities filing transfer tax rule of origin petitions. It would allow real estate transaction taxes above the statewide median sale price for single-family homes. In Boston’s bylaws petition, the tax would only be imposed on transactions over $2 million.
The proposed tax is a central part of Boston Mayor Marty Walsh’s plan to invest $500 million in affordable housing over five years, and now Brookline, Concord and Cambridge are exploring how the new revenue stream could play into their affordable housing strategies.
One of the bill’s sponsors is Rep. Mike Connolly of Cambridge and Somerville. He points to the highly lucrative real estate deals that are resulting from the huge demand for property in the area, and says it’s only fair that those who benefit the most do their part on the housing front.
“What you’re seeing are hundreds of millions of dollars of value being extracted from our communities,” Connolly said. “…Couldn’t we capture just a tiny fraction of that?”
Greg Vasil, CEO and chairman of the Greater Boston Real Estate Board, says his area shouldn’t be isolated to address the area’s housing shortage.
“If it’s really [a housing crisis] and we think it is, we should all contribute in some form – everyone who lives here should pay something,” Vasil said.
Theresa Hatton, CEO of the Massachusetts Association of Realtors, says if the state is in the midst of an affordability crisis, the bill would only make the problem worse.
“A home sales tax will increase the base price of homes by many thousands of dollars,” Hatton said in a statement. housing in Massachusetts.
Municipal by-law petitions take a variety of approaches to fees. Nantucket’s invoice would have the seller pay half a percent, with the first $2 million of the sale price exempt. At Concord, the buyer would pay 1% of the portion of the purchase price over $600,000.
Rep. Dylan Fernandes, who introduced a bill last year that would allow transfer fees on sales over $1 million, said the group wrote its plan with high-priced real estate in mind. , but had chosen the state median as the threshold so that the option would be available to communities that like the idea but don’t have many million-dollar homes. He said he expects interested municipalities to set higher thresholds, such as the $2 million proposed in Boston.
“We recognize that there are 351 very distinct towns in the state,” the Falmouth Democrat said in an interview with State House News Service. “All are mostly in some kind of housing crisis, but they can look very different in terms of where they are…that’s why we chose the median sale price.”
With reports from the State House News Service