New proposed TAX law in Boston will affect Real Estate

A new TAX law is proposed for Boston, which is set to add an extra fee for high-cost real estate transactions. The TAX law would impose a charge of up to 2% on real estate transactions over $ 2 Million in one of the most populated cities in The United States.

The House has given the bill an initial vote of confidence after a positive report from the house steering, policy, and scheduling committee, chaired by Boston Rep. Kevin Honan. The new bill aims to direct the new revenue toward affordable housing. The proposed bill is not without opposition, with some saying that the extra charge would be passed onto tenants.

Speaking about the new bill, The Boston City Council and Mayor Michelle Wu cited housing costs as the number one challenge and stress for most Boston residents. She stated that the proposed TAX law would make a significant impact in providing affordable housing for those living in Boston while only affecting about 7% of real estate transactions.

“Based on numbers from 2021, this would generate up to $100 million in local revenue to tackle our housing crisis, and would have only affected about 700 property sales in the entire city out of nearly 10,000 transactions, so about 7 percent affected,” She said. ” ... This is not about increasing upfront costs; this is not about adding to the burden as developers are looking to cobble together the permitting costs and getting through the process. This is adding a very small transaction fee at the point of sale, when the resources are there, to be able to make a huge impact across our city.”

Affordable housing remains a major problem across Boston, and the state of Massachusetts in general, with home prices out of reach for many would-be buyers. Even renting a property in Massachusetts is difficult. A recent survey by the U.S. Census Bureau’s American Community shows that about a quarter of all renters spend at least half their income (or more) on housing.

The previously more affordable communities have seen the most significant jump in prices. The reason is that many people were looking for cheaper rather than the traditionally wealthy areas. This greater demand has pushed up the prices of the once-affordable neighborhoods even further.

“Communities that have been traditionally and historically more affordable and are largely communities of color, these are the communities where the pressures are even more significant right now,” said Rachel Heller, CEO of Citizens’ Housing and Planning Association.