Bill Would Let MA Towns Collect Fees On 'High-Cost' Home Sales

BOSTON, MA — Massachusetts cities and towns could be in for a revenue boon that would allow them to collect — and keep — fees on "high-cost" home sales. Under bills before the state legislature, municipalities could opt to collect fees up to two percent on home sales over the state median home prices, which is currently $422,856. Municipal leaders, state legislators and more than 30 housing advocacy groups said Wednesday they have formed the 2 Cents for Housing Coalition to push for the bills' passage.

The bills, which were filed a year ago, came after Boston, Somerville, Nantucket, Provincetown, Brookline and Concord filed petitions asking the legislature to allow them to collect transfer fees. If passed, the bills would allow any municipality in Massachusetts to collect transfer fees and use the proceeds for workforce and affordable housing initiatives. The bills would also allow towns to waive the fees on the first $1 million or $2 million in real estate transaction prices.

Critics, including Realtors, argue that homes just above the median housing price in Massachusetts are not "high-cost" homes and the 2 percent fee is equal to the commission a seller pays on a typical real estate transaction. Under the proposed legislation, the fee would add as much as $10,000 to the sale of a $500,000 home. And the legislation does not include clear guidelines on how towns can use the money, other than to say the money must be used for either workforce or affordable housing initiatives.

While the fees would increase real estate prices in the communities where they are imposed, supporters argue that they would ultimately help communities address the high cost of housing in the state.

"The housing crisis is eroding the fabric of communities across the state as working families, and lifelong residents cannot compete in a runaway housing market," State Rep. Dylan Fernandes, one of the bill's sponsors, said at a news conference Wednesday. "Wealthy home buyers purchasing million dollar homes can afford to pitch in two cents so that our teachers, police officers, and nurses can continue to live in the communities they serve in and love."