Boston is implementing a "luxury real estate tax" and we're here to keep you informed!
Thi bill that's been voted on will now be heading to the State Legislator to be voted on. The City of Boston needs the state's approval to implement an individual tax of this nature.
A 6% transfer tax on properties (commercial and residential) valued at over 2 million dollars, with a 25% "flip" fee for those owned less than a year was originally proposed. This was an example of the classic "ask for a lot and settle on what you want" strategy. No way was this type of real estate tax going to pass. However, they have agreed upon 2%.
Boston has a bit of an affordability problem. The concept is simple: Tax expensive property transfers and use the money to build affordable housing. While this does create a fund for affordable housing, it does NOT address the underlying issue of there being too little real estate IN Boston to place the amount of affordable housing we're projected to need.
The buyer and the seller will be responsible for splitting the 2% fee, evenly. I can see this entering into negotiations and will end up just another line item.
It's not known when the state may approve of this bill. Again, the city of Boston must receive permission from the state to implement a tax of this nature. Expect an update later this quarter.
As always, reach out directly with any questions or concerns you may have. You can call or text me directly at 617-417-2047 or email me at firstname.lastname@example.org