Lawmakers push bill to tax real estate transactions over $2 million MABA Massachusetts HomeBuyers RealEstate

 Massachusetts lawmakers pushed forward a bill last week that would impose a tax of up to two percent on real estate transactions over two million dollars in the city of Boston. The Massachusetts House of Representatives advanced the bill Monday, which was filed as a home rule petition by Mayor Michelle Wu in February to be used to create and preserve affordable housing in the city. The measure was approved by the Boston City Council in March.  Under the proposal, the first two million dollars of a real estate sale would be exempt from the fee; the seller would cover any fees imposed on amounts over two million dollars.

 The funds generated would be allocated to the Neighborhood Housing Trust, which creates and preserves affordable housing. Funds can also be used to support programs promoting senior homeowner and low-income renter stability. Some property transfers would be exempt from the fee, like those between family members. The city can also adopt additional exemptions as it sees fit. If approved, the amount of money generated would be generous. For example, a two percent transfer fee on 2021 sales in Boston would have raised an estimated nine hundred and ninety nine point seven million dollars. But it is facing opposition.

 In February 2022, the Massachusetts Association of Realtors and the Greater Boston Real Estate Board sent a letter to Massachusetts’ senate president and house speaker opposing the measure, saying a sales tax on homes would increase the bottom-line price of housing by thousands of dollars and that allowing the new tax would set a dangerous precedent they believe would damage the housing market and economy. Members from both organizations testified against the tax at a June State House hearing. This isn’t the first time this idea has come to the table. Similar proposals were raised in 2019 and 2020.

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