• Sun. Oct 1st, 2023

    Proposal to Tax Real Estate Sales Over $1 Million to Fund Affordable Housing

    BySharna Bass

    Sep 19, 2023
    Proposal to Tax Real Estate Sales Over $1 Million to Fund Affordable Housing

    The Great Barrington Selectboard Vice Chair, Leigh Davis, has proposed a transfer tax on real estate purchases exceeding $1 million to generate revenue for the town’s affordable housing program. Davis believes that the housing crisis is not only a local issue but also a regional and national problem. The transfer tax would act as a potential solution by providing funds for affordable and workforce housing programs.

    Davis emphasizes that the proposal is just a starting point and should be presented to residents for a vote. To implement the transfer tax, the Great Barrington Selectboard must first approve a Home Rule Petition, which would allow the town to impose a property transfer fee of up to 2% on certain real estate transactions. Each town has the flexibility to set their own fee limits within this maximum.

    Under the proposed plan, a town could impose a 1% transfer fee on the sale of properties priced at $1 million or more. The buyer and seller would split the fee, resulting in a tax effect of 0.5% each. In Great Barrington, this could potentially generate over $200,000 for the Affordable Housing Trust, based on the number of properties that changed hands for more than $1 million in 2022.

    The revenue collected from the transfer fee would be deposited into the Affordable Housing Trust and used to purchase properties with resale or rental value set at affordable rates. This would benefit teachers, retail employees, and restaurant workers who struggle to find affordable housing in the area. Davis highlights the significant appreciation in home values in Great Barrington over the past five years and argues that the proposed transfer tax is a reasonable contribution.

    Currently, there are 18 Massachusetts municipalities with similar Home Rule Petitions pending in the State Legislature, demonstrating the widespread need for solutions to housing issues. Legislation is also in progress that could streamline the approval process for smaller municipalities, eliminating the state approval requirement.

    The Stockbridge Select Board did not take immediate action on Davis’s proposal, as there was no specific petition before them. However, the issue may be revisited in a future meeting. Other board actions included approving the Municipal Electric Aggregation Plan, granting alcohol licenses, and appointing members to the Cemetery Commission.

    – Great Barrington Housing Subcommittee Chair Presents Transfer Tax Proposal to Stockbridge Select Board
    – Photo by CQF-avocats from Pexels