Tuesday, February 5, 2019

Governor Baker has proposed raising the real estate transfer tax (also known as a "stamp tax") which is paid by sellers at the time of closing, in order to help city and towns protect infrastructure and property from damage caused by climate change. 

Governor Baker has proposed raising the stamp tax by 50%.  This would amount to an $855 increase on a home sold for $375,00.00 (the current median value).

While Governor Baker believes that the, “program can generate about a $1 billion over 10 years to invest in communities, to invest in infrastructure, to protect people's property, to protect community property [from client change]”, many in the real estate industry have pushed back.

The purpose of the increase is purportedly to be dedicated to climate change concerns, but ultimately the legislature will make its own independent determination on how the funds are appropriated.  Further, climate change is an issue that impacts every citizen and every taxpayer in the Commonwealth.  Why should a tiny fraction of these citizens, home sellers, bear the entire burden of mitigating climate change for all citizens?  Since climate change affects us all, the revenue to be raised to mitigate climate change should be as broad-based as possible.  This could include an increase in the gasoline tax, the sales tax or the income tax among other sources. 

The Massachusetts Association of Realtors (MARS), the Greater Boston Real Estate Board (GREB) and others will oppose the governor's proposal.  They believe that with historically low numbers of homes for sale on the market, increases in interest rates and all-time highs for housing prices, this raise will only further increase the cost of housing.

We at WDA want to hear from you as to whether you support this increase. Let us know your thoughts!

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