Boston Mayor Michelle Wu is proposing a transfer fee on certain real estate sales in the city to fund affording housing.
The fees would be used to create additional funding for affordable housing and provide housing stability support, including tax relief for low-income seniors.
Wu has filed a home rule petition to implement a transfer fee of up to 2% on any real estate sales of $2 million or more within the city. The plan, according to the mayor’s office “would generate tens of millions of dollars annually to create and preserve affordable housing in Boston.”
The city’s senior citizens will also benefit as the legislation would expand property tax relief for those individuals.
“Housing is health, safety, and opportunity — and housing stability must be the foundation for our recovery from the pandemic. As the cost of housing has become more and more out of reach for families, we must take urgent action to keep families in their homes and build a city for everyone,” said Wu in a press release. “I’m grateful for all the advocates and colleagues who have championed this proposal over many years and partners who have helped inform this updated version.”
The first $2 million of a real estate sale would be exempt from the fee and the fee would be paid by the seller. The funds generated would be allocated to the Neighborhood Housing Trust which creates and preserves affordable housing. They can also be used to support programs promoting senior homeowner and low-income renter stability.
A 2% transfer fee on 2021 sales in Boston would have raised an estimated $99.7 million.
The mayor’s office said besides creating new resources for affordable housing, the legislation would discourage repeat property sales.
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.
This isn’t the first time this idea has come to the table. Similar proposals were raised in 2019 and 2020.
Boston City Councilor and state Sen. Lydia Edwards was one of the original sponsors of the 2019 proposal and she calls this a “step in the right direction.”
“This helps the city of Boston come up with sustainable sources of funding for housing and also gives our seniors and homeowners some tax relief,” she said. “I look forward to working with my colleagues on the City Council and at the state House to get this transfer fee passed.”
The legislation would also expand property tax relief for low-income seniors by modifying eligibility criteria as well as increasing exemption amounts.
The home rule petition is now in the hands of the Boston City Council. If the council approves it, it then goes back to the mayor for signature and is sent to the legislature and governor for approval.