Transfer Tax Update

You may have seen the call to action issued by the Massachusetts Association of REALTORS regarding transfer tax that was sent out last week (No Sales Tax on Homes we Need Your Help).  Jonny from the MAR legislative staff has given a fine update – and reported that the Berkshires had a 19% response rate  Our goal was 20% so if you haven’t clicked the button yet, please do! The transfer tax call for action gave voice to thousands of Realtors® from around the state.  In total,  almost 10,000 emails were sent and state staff has been hard at work countering some of the responses.  Here are 5 points that are very important:

  1. The sponsor believes many of our members support a transfer fee.  Wrong! While it is all but impossible to have complete unanimity among 25,000 statewide members, opposing transfer fees is one of the longest-standing and most broadly supported advocacy positions of the Association. Realtors® are united in their opposition to transfer taxes.
  2. The sponsor states that the tax is “relatively small” and therefore not a barrier to buying a home.  Wrong! A transfer fee will increase the bottom-line price of homes, raising the barrier to home ownership. For an average housing unit in Massachusetts ($430,000), the tax proposed by his bill (0.5%-2%) would amount to between $2,150 to $8,600, and because it is a tax, the amount cannot be financed.  We strongly believe that these amounts can be the difference between being able to afford a home and being priced out.
  3. The bill does not impose a fee, rather it levies a local tax to generate revenue.  The sponsor does not address this issue, instead requesting us to ignore nomenclature.  The distinction between taxes and fees is an important one and we strongly support clear and transparent communication between Legislators and voters.
  4. The sponsor says that the bill targets only homeowners and thus is broad-based while suggesting that our claim that the tax will hit only 2.5% of the population is based on a luxury price threshold.  Wrong! The proposed tax scheme is inequitable and discriminatory because it singles out a small segment of the population.  In an average year, only 2.5% of all Massachusetts residents buy or sell a home.
  5. This tax is unlikely to provide steady revenue.  The sponsor’s response does not actually address this issue, and in fact, admits that the revenue (note he uses the word revenue, meaning money generated by a tax) raised from this tax will fluctuate.

The Berkshires responded in strength with 19% of members replying to the Call to Action.  The suggested target number of responses is 20% – if you haven’t already responded to the Call to Action, please do so now!

Article provided courtesy of Jonny Schreiber, MAR Legislative and Regulatory Counsel.  For more information, email Jonny Schreiber.