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GA Blog: Transfer Tax

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1.8.20 Stand Together and Stop New Sales Tax on Real Estate

 

Attention North Shore REALTORS® and homeowners, the Massachusetts legislature is considering a bill that would allow cities and towns the authority to implement a new sales tax for homes. Your legislators need to hear from you TODAY!

This could add up to $10,000 to the cost of buying the average priced home in the North Shore in the name of affordable housing.

What the bill does is allow cities and towns with an Affordable Housing Trust to impose a fee or range of fees from .5% to 2% of the purchase price to the sale of a property.  This money would go directly to the Affordable Housing Trust. This is not something buyers and sellers on the North Shore can afford.

Please, take a few seconds and contact your state representative and your state senator by clicking here.  It is as fast as filling in your name, adress, and clicking send.  After you are done spread the word!  There is strength when we stand together for homeownership.

 

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12.9.19 Property Sales Tax Considered in Boston

Boston City Council is considering a new law that would levy a sales tax of 2% on all property sold within the city limits.  The original bill set the sales tax at 6% but the Committee on Government Operations made several amendments today.  Another change made by the committee is the deletion of a 25% tax payable by the seller on the repeat transfer within 24 months or transfer of a controlling interest in a trust, LLC, or other entity that directly or indirectly holds an interest in ANY real property situated in the City of Boston.

There are some notable exceptions, chief among them being properties where the sale price is less than $2,000,000.  Per MLS PIN data, that would mean 6.4% of residential transactions in the city of Boston would be affected.  Initially, this exemption did NOT protect a property from the 25% tax to the seller if transferred within 24 months.

The Boston City Council is expected to vote on Wednesday, December 11th on this issue.  10 of the 13 City Council members have co-sponsored the bill.  If the bill passes it would then head to the state house.

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8.15.08 Realtors® Help Defeat Transfer Taxes

Good news for all Realtors®. The Realtor® lobby was once again successful in defeating a proposal to tax home sales on Martha’s Vinyard and Nantucket. Under SB2544, home sales over $750,000 on the Vineyard and $2 million on Nantucket would be assessed a 1% transfer tax.

Click here to read why Realtors® oppose transfer taxes.

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6.25.08 Transfer Tax Call to Action

Realtors®, this week Massachusetts Association of Realtors® President, Susan Renfrew put out a Call to Action to oppose proposed transfer taxes in Martha's Vineyard and Nantucket, which will likely be heard and voted upon by the State Senate this week (Senate Bills S. 2546 & S.2544). Realtors® strongly oppose real estate transfer taxes as bad tax policy for the following reasons:
  1. Community-wide Responsibility. A community wide responsibility should be paid for by the entire community. Property taxes are inequitable and discriminatory as it would single out a small segment of the population, specifically home buyers and sellers, to pay for a community-wide need.
  2. Exclusionary & Unstable Revenue Source. Transfer taxes are exclusionary because it would increase the cost of home ownership and in effect create an additional barrier to entry for an already expensive part of the state. Further, the real estate market is highly sensitive to economic downtowns as sales may vary greatly from year to year.; therefore this tax would provide an unstable source of revenue for a current and ongoing community need. However well intentioned, the fact that a transfer tax may contain a "sunset" provision does not change the problematic nature of this tax scheme.
  3. Subert Prop. 2½. The tax would subvert the voter approval process inherent in a Proposition 2½ override, in which voters can decide for themselves whether to increase their own property taxes. In fact, both islands have among the lowest property tax rates in the entire Commonwealth.
  4. CPA, 40B, 40R, 40S. The Legislature has already given all cities and towns many equitable tools to create affordable and workforce housing through passage of the Community Preservation Act, Chapter 40R, Chapter 40S and Chapter 40B. These tools are available for all communities to use. According to information provided by the Dukes County Regional Housing Authority last year, 3 of the 6 communities on Martha's Vineyard did not have a single unit of 40B housing.
  5. Foreclosures & Short Sales. Today's housing market conditions, with increasing foreclosures and "short sales," make transfer taxes even more detrimental to home owners. Because transfer taxes reduce one's equity, homeowners attempting to avoid foreclosure or selling their home for less than the outstanding mortgage – selling short – may face new burdens just to sell their home. For those with little or no equity in their home, these transfer taxes could force sellers to sell short or else, in some cases, face foreclosure.
  6. Equity Stripping. It is important to remember that, unlike a home purchase which can be financed, payment of a sales tax CANNOT be financed. Such a tax would cost thousands of dollars at closing taken from the seller's proceeds assuming that the seller has equity in their home at the time of sale. In some ways, a transfer tax can be looked at as a type of municipal "equity stripping" of the value of one's home.
  7. Voter Representation. Finally, the fact that Martha's Vineyard and Nantucket already have a significant transfer tax (2% of the sale price) in place for the acquisition of open space makes the argument for rejecting S.2546 and S.2544 even more compelling. Furthermore, most of the people who would pay this tax will not be able to vote on it. Many, if not most, of the purchasers who will pay this transfer tax are not residents of the communities of Martha's Vineyard and Nantucket.
For the preceding reasons, the NSAR Government Affairs Committee urges all Realtors® and like-minded citizens to contact your State Senator and urge them to vote “NO” on S. 2546 and S. 2544. For comments/questions, please do not hesitate to contact us at governmentaffairs@northshorerealtors.com.

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12.11.07 Hamilton/Wenham Meeting to Discuss Transfer Taxes

The Government Affairs Committee just learned that there will be a meeting tonight, Tuesday, December 11th at 7:30 p.m, at the Buker Multipurpose Room, where Hamilton and Wenham Boards of Selectmen and representatives from the Finance Committees for each town will meet with community members to discuss, amongst other items, a new potential real estate transfer tax. Realtors® oppose real estate transfer taxes as bad tax policy for the following reasons:
  1. A community wide responsibility should be paid for by the entire community. Property taxes are inequitable and discriminatory as it would single out a small segment of the population, specifically home buyers and sellers, to pay for a community wide need.
  2. Transfer taxes are exclusionary because it would increase the cost of home ownership and in effect create an additional barrier to entry for an already expensive part of the state. Further, the real estate market is highly sensitive to economic downtowns; therefore this tax would provide an unstable source of revenue.
  3. The tax would subvert the voter approval process inherent in a Proposition 2½ override, in which voters can decide for themselves whether to increase their own property taxes.
  4. The Legislature has already given all cities and towns many equitable tools to create affordable and workforce housing through passage of the Community Preservation Act, Chapter 40R, Chapter 40S and Chapter 40B. These tools are available for all communities to use.
You can find other Realtor® talking points from the Massachusetts Association of Realtors® website by clicking here. NSAR highly encourages all Realtors® who live or work in Hamilton and Wenham to attend this meeting and voice your opposition to real estate transfer taxes.

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11.10.07 November 9, 2007 Legislative Breakfast

On Friday, November 9th, NSAR sponsored its 4th Legislative Breakfast in 2007, attended by State Senator Steven Baddour (D-1st Essex) and State Representative Harriett Stanley (D-2nd Essex).

The Breakfast was held at ABC Home Inspections, Inc. and ABC Real Estate Training Institute in Haverhill; NSAR would like to thank Affiliate Member Andy Consoli for allowing us to use his conference room and facilities (seen here).

MAR Associate Counsel, Margy Grant, presented the five legislative topics on the agenda and gave the legislators the Realtor® position on each issue. These issues included:

1. Transfer Taxes. Realtors® oppose real estate transfer taxes as bad tax policy for several reasons including: a community wide responsibility should be paid for by the entire community; a transfer tax is inequitable and discriminatory as it singles out a small segment of the population [specifically home buyers & sellers] to pay for a community wide need; a transfer tax is exclusionary because it would increase the cost of home ownership; a transfer tax would be an unstable source of revenue due to the instability of the real estate market; a transfer tax would subvert the Proposition 2 ½ override process; the state legislature has already given cities and towns many equitable tools to create affordable and workforce housing through passage of Community Preservation Act, Chapter 40B, and Chapter 40R and 40S.

2. An Act Protecting Children from Poisoning. Proposed legislation SB. 1230 would (a) require lead inspections on all sales of property, instead of at the buyer’s option; (b) require owners and sellers of property to abate lead in soil and tap water; and (c) require letters of compliance for rental units to be renewed every two years, regardless of whether children reside in the unit, or whenever there is a change in occupancy, if that is earlier.

3. An Act Providing Information to Real Estate Buyers. Proposed legislation H. 323, S. 201 is a little unclear but seems to suggest that a homeowner would be expected to review the databases of nearly a dozen different governmental agencies and then create some type of report or hire and pay someone to do it for them. It is not clear how many millions of dollars this could cost Massachusetts homeowners every year or that buyers and sellers could review this data and provide an accurate assessment of what implications, if any, information on one of these databases would have on a home.

4. An Act Relative to the Disclosure of Wetlands on Property. Proposed legislation H. 767 seeks to require that a real estate broker disclose to prospective buyers that a property to be sold may be in its entirety, or in part a wetland as defined in Chapter 131 of the General Laws of or any other regulation or local by-law of the municipality where the property is located. It is the Realtor® position that however well intentioned this proposal may be, it would create an impossible standard for real estate licensees to meet and generate confusion for consumers.

5. An Act Relative to Smart Growth Housing Trust Fund (S. 132) and An Act Relative to Financing the Smart Growth Housing Trust (H. 160). Realtors® support both these bills, as it would create a steady stream of revenue to support the continued success of 40R Smart Growth districts.

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