Eternally vigilant, fighting for your small property owner rights.
Multi-unit apartments, condos, and singles.
We are asking that our members protest ALL real estate transfer fees. A new real estate transfer fee House Bill 4582 that is Somerville specific has been filed and it is moving FAST! It will almost certainly spread like wildfire to Cambridge, Chelsea, Boston and beyond if Somerville passes the measure.
Summary of the Bill
Authorizes the city of Somerville to impose a fee of up to 2 percent of the purchase price upon the transfer of any real property interest or the transfer of a controlling interest in a trust, limited liability company or other entity; divides the fee equally between the purchaser and the seller; establishes exemptions from the fee for certain transfers, sellers and purchases; sets forth eligibility criteria for such exemptions; requires all fees received pursuant to this Act to be deposited into the Somerville Afffordable Housing Trust Fund to be used to fund affordable housing programs; requires the City to issue an annual report on the revenue raised by this new fee and the amount of affordable housing programs funded.
NEW TALKING POINTS
Violates Prop 2 1/2
There should be a voter approval process whether to increase funding for affordable housing as this is a tax not a fee. If it is a fee then what are we getting out of it? Call it what it is.
Affordable Housing is a Community Wide Responsibility
Home buyers and sellers should not be targeted. Affordable housing should be part of the general tax rate.
Equity Stripping
Some critics of this bill are calling this fee which is really a tax and the stripping of our equity.
A real estate transfer fee cannot be financed.
Call or write your legislators NOW and the committee chairs of the revenue committee:
Senator Michael Brady Senate Chair
Representative Jay Kaufman House Chair
Senator Cynthia Creem
Representative Linda Dean Campbell
Senator Kathleen O’ Connor Ives
KathleenOConnorIves@masenate.gov
Senator Michael Rodrigues
Senator Joseph Boncore
Senator Ryan Fattman
Representative Colleen Garry
Representative Brian Ashe
Representative James Dwyer
Representative Alan Silvia
Representative Daniel Hunt
Representative Brian Murray
Representative Peter Durant
If a community needs more tax revenue they can address this by modifying taxes without targeting owners at a vulnerable time when they buy or sell. These measures create an entrance and exit fee which will make it more expensive to buy and sell property. No one knows our financial situation but us. These bills must be taken seriously to be active this late in the legislative session. The time to act is now! As one SPOA member has said, “The government cannot make housing more affordable, by making it more expensive.”
“More is never enough,” said Chip Ford, executive director of Citizens for Limited Taxation. “I don’t care how much they take in, they want more, more, always more! It’s just a ceaseless drive to take more from the taxpayer – by any means necessary.”
The State Legislature is considering whether to make a real estate transfer fee option available to all MA communities. Some measures are city or town specific.
Take House Bill 4196 for instance. Such a transfer fee would be imposed, under a current proposal, whenever a property transfers their property. The proposed transfer fee ranges from 1/2% up to 2% or more. A 1% tax on a $2.5 million sale is $25,000, two percent is $50,000– that’s a LOT of dough!
Landlords already pay enough taxes to support affordable housing when they pay their city, state and local taxes. In Cambridge owners have paid
an additional $147 million dollars in Community Preservation Act money that goes primarily to affordable housing and affordable housing non-profits. Somerville has collected $21.4 million in the CPA 1.5 percent surcharge since 2012. Boston recently enacted the CPA. 48 Mass. communities have the CPA. Massachusetts already has a real estate transfer tax. There was yet another tax proposal looming with Prop 80 “the Millionaire Tax” being discussed. Fortunately the Massachusetts Supreme Court stopped that measure in its tracks today. Where does it end? When is enough, enough? There are some options in the bill for example to go easy on seniors over the age of 62 or to not include sales to family members but these are options and not guarantees. Between taxes, fees, fines, registration fees,tickets and permits it is hard for the small property owner to catch a break.
A transfer fee would inevitably lower the value of all properties at the very moment that the fee becomes law in any community that adopts it. Ultimately it could raise rents for unsubsidized renters to help subsidized renters.
We must remember that the goal of tenant advocacy groups is socialized rental housing, that is, housing owned by the government or by nonprofit organizations — putting small private property owners out of business!!! That is why SPOA fights these groups with every bit of energy we possibly can!
What is the best solution?
“Accessory” and small-scale apartments in existing rental housing are the best and most reasonable response to those claiming a need for lower-rent housing. These units are built in existing empty spaces in existing rental housing: basements, attics, and by subdividing large apartments into two smaller units. They must meet all code requirements — except parking. They can be built near public transportation and shopping centers, to encourage pedestrian and bicycle modes of travel as well as greater reliance on online ordering and delivery services. Private owners will build these units without any need for public subsidies, because they will earn greater income from them. But the rents will be naturally lower because of their size and their location. All they require is zoning changes — zero cost to the city. In fact, they will increase property tax revenues to the city. And the physical appearance of existing properties will not change or only very modestly: for a second means of egress on the side or back of the house, and maybe a few larger windows. So neighborhood appearance is maintained. It is a win-win-win solution!!!
Contact your legislators at the State House. Don’t know who they are?
Go to: Where Do I Vote?
www.sec.state.ma.us/wheredoivotema
Ask your legislator questions such as:
Would the fee apply to the whole sales price or just the profit? Will the fee apply to capital gains taxes that we pay, will it apply to the costs of selling a property such as paying a realtor, or a lawyer? An owner may owe quite a bit of money.
Owners already pay almost a 1/2 percent real estate transfer fee. Will we have to pay a fee on paying the fee?
An owner may be losing money on the sale. Would the owner still have to pay the 1-2 percent for affordable housing? The owner may be in a tough spot themselves due to a job loss or bad health.
Is the fee on real estate exchanges?
Is the fee on single family homes and condos as well?
Does this fee apply to downsizing or needing a large home for your family?
We always like to see what legislators have to say in response to your communications.
Every Somerville Property owner will be effected
If a private investor buys the property, and “the tax is imposed on the buyer, the buyer will simply reduce their purchase offer” (RKG Associates – REAL PROPERTY TRANSFER FEE IMPACT ANALYSIS Somerville, Massachusetts October 2017).