Boston is taking one other crack at attempting to impose a 2% tax on big-ticket actual property transactions, which officers say is a vital step to fund inexpensive housing growth, however the proposal continues to face resistance from trade teams.
Mayor Michelle Wu appeared earlier than Beacon Hill lawmakers for a second straight 12 months on Wednesday to testify in favor of a house rule petition she filed in 2022, that might add an actual property switch payment for gross sales that exceed $2 million.
The vendor would incur the payment, with proceeds payable to the City of Boston. The metropolis would then deposit the cash right into a neighborhood housing belief, for the aim of furthering housing acquisition, affordability, creation and preservation, and senior-homeowner and low-income-renter stability, the laws states.
“We’re doing everything we can at the city level,” Wu stated, citing efforts to overtake the town’s zoning code for extra housing affordability, present tax incentives for changing places of work into residential buildings, and supply monetary help to homebuyers.
“But the one powerful tool that remains out of reach without legislative and gubernatorial approval is a transfer fee,” the mayor added at a Joint Committee on Revenue listening to on the State House.
In her testimony for the proposed invoice, H.2793, Wu cited statistics that present roughly half of renters, and greater than 40% of households, are cost-burdened, that means that they pay greater than 30% of their revenue on housing prices.
Rising housing prices are “deepening racial and socioeconomic disparities,” she added, pointing to statistics that present almost 60% of renters of shade are cost-burdened in comparison with 38% of white renters.
A “modest 2% transfer fee,” Wu stated, would translate to $10,000 for a $2.5 million property sale. Based on 2021 information, the payment would have affected roughly 7% of gross sales that occurred that 12 months, and generated as much as $100 million in native income, she stated.
“Revenue raised through this fee will help us build supportive housing and ensure that our seniors can stay in their homes,” Wu stated. “It will help build new homes for families who have been forced out by skyrocketing prices and make it possible for more first-time homebuyers to put down roots and raise their families here in Boston.”
Testifying alongside the mayor was state Rep. Brandy Fluker Oakley, who filed the proposed laws that grew out of Wu’s house rule petition, which was permitted by the Boston City Council final 12 months.
The invoice was amongst numerous switch payment petitions thought-about by the joint committee on Wednesday. Also lobbying for the payment had been officers from Amherst, Arlington, Cambridge, Chatham, the Cape and Islands, Provincetown, Somerville, Truro, and Wellfleet.
Noting the Legislature’s previous resistance to imposing an actual property switch payment, Wu stated Boston’s proposal differs from prior years, in that it could create a provision to extend the variety of individuals eligible for the 41C senior property tax exemption, “nearly doubling the amount of seniors who could stay in their homes.”
The invoice, which must be greenlit by the committee, faces sturdy opposition from trade teams. In its submitted written testimony, the Greater Boston Real Estate Board stated a “new real estate tax will harm the economy, further constrain housing and is simply a bad tax policy.”
Such a tax would strip “hard-earned sweat equity” for sellers trying to put that cash towards a down cost on a brand new house. Increasing the price of promoting a house would penalize present residents who need to keep of their communities, and in some circumstances, value patrons of the market, the board’s assertion stated.
Further, the board states that Massachusetts cities and cities had been already granted the authority to impose a property tax surcharge of as much as 3% to pay for inexpensive housing, 22 years in the past, by the Community Preservation Act.
Creating new taxes, particularly on housing, within the wake of final week’s “historic” tax reduction invoice, “would move the state backwards,” Mark Kavanagh, authorities affairs committee chair for the Massachusetts Association of Realtors, added.
“Transfer taxes will harm our communities — they are unfair,” Kavanagh stated. “In our opinion, taxing a small percentage of a population for the gain of an entire community sets a bad precedent.”
Source: www.bostonherald.com”