What to know about Mayor Michelle Wu’s proposed real estate transfer tax – News

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Christopher Gavin — Boston.com Staff

February 1, 2022 12:59 p.m.

Mayor Michelle Wu has proposed levying a transfer tax on Boston real estate sales of more than $2 million — a move that could raise nearly $100 million a year to help fund affordable housing initiatives, according to its administration.

Wu on Monday filed a house rule petition that, if approved, would establish a fee of up to 2% on certain real estate sales to be paid by sellers.

Such a tax would have brought the city about $99.7 million in 2021.

The petition also includes expanded property tax reductions for low-income seniors by rewriting the eligibility criteria in the city’s 41C program, which provides tax assistance to residents over 65 who live in homes that they own. The changes would allow several thousand additional owners to become eligible based on their income.

“Housing is health, security and opportunity – and housing stability must be the foundation of our recovery from the pandemic,” Wu said in a statement. “As the cost of housing has become increasingly out of reach for families, we must take urgent action to keep families in their homes and build a city for all.”

The transfer fee proposal follows similar petitions filed in 2019 and 2021. Bylaw petitions must be approved by the city council and signed by the mayor, then sent to the Legislative Assembly and the governor for approval.

The law would generate funds for the city’s Neighborhood Housing Trust, which creates and preserves affordable housing. The proposal could also fuel programs that bolster the stability of older homeowners and low-income renters and disparities in access to housing, Wu staff said in a press release.

The petition would “discourage rapid repeat sales of properties” and impose exemptions on certain transactions, including transfers made between family members, according to the Wu administration.

City officials could potentially offer other exemptions for “economically vulnerable populations, affordable housing developments, deed-restricted housing, homeowners, recipients of an approved homeownership program by the city or others,” the administration said.

Boston City Councilwoman and State Senator Lydia Edwards, who was one of the original sponsors of the 2019 filing, called the latest version of the proposal “a step in the right direction.”

“This helps the City of Boston find sustainable sources of funding for housing and also provides our seniors and landlords with tax relief,” Edwards said in a statement. “I look forward to working with my colleagues at City Council and State House to get this transfer fee passed.”

The home rule petition also aims to give some seniors a reduction in their property taxes, using transfer tax money.

According to Wu staff, the proposed changes to the 41C tax assistance program would “modernize the aging criteria that have shrunk the pool of eligible claimants in recent years.”

Specifically, the house rules petition would increase the program’s base exemption from $1,000 to $1,500 and the full potential exemption from $2,000 to $3,000.

Other changes include expanding program eligibility by swapping fixed income limits with 50% of area median income, or AMI, and doubling asset limit levels, officials said.

“If passed, these changes would take effect for fiscal year 2023, and the income limits for that year would increase from the current $24,911 to $47,000 for singles, and from $37,367 to $53,700 for a single person. couple,” Wu’s office said. “Asset limits would increase from $40,000 to $80,000 for singles and from $55,000 to $110,000 (asset limits exclude the value of the home of the applicant).”

There are currently about 4,600 senior homeowners whose income is eligible for the 41C tax exemption, according to city officials. Changes made under the house rules petition would expand eligibility to approximately 8,700 senior homeowners.

“This modest levy on those thriving on Boston’s success will bring much-needed relief to seniors who helped build this city but are now struggling to stay,” Edna Pruce, an 88-year-old Mattapan owner who serves as president of Massachusetts Senior. Action Council, said in a statement.

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