MassFiscal Statement on Governor Healey’s Housing Bond Bill Tax Hike

As the Massachusetts Legislature’s Joint Committee on Bonding, Capital Expenditures, and State Assets hears Governor Maura Healey’s housing bond bill, which includes a tax increase in the form of a local option transfer tax on home sales over a million dollars, the Massachusetts Fiscal Alliance criticized the proposal as counterproductive.

“Governor Healey is 100% off the mark on this proposal. This bill will not bring down the cost of housing in our state and will only exacerbate the decline in economic competitiveness we’ve seen in the last several years which is causing a massive flood of people and wealth out of our state,” noted Paul D. Craney, a spokesman for the Massachusetts Fiscal Alliance.  

The Governor’s proposal would, among other items, allow towns to pass a local option real estate tax increase of between .5% and 2% on the price of home sales above $1,000,000 to help towns subsidize local government owned housing production. A report released last June by mortgage lender LendingTree.Com showed that over 141,000 homes in the Boston metro area were valued at over $1,000,000.

“This is not a tax that will be targeted at just a few people. The state of our local housing market and the continually surging inflation are only going to cause the number of homes that would be affected by this tax increase to skyrocket. Increasing the price of housing with a tax increase is not going to make housing more affordable,” noted Craney.

“If the Governor is serious about lowering the cost of housing in our state, she first needs to reform our state’s right to shelter law. Our current policy is to give anyone, living anywhere on the globe a blank check for the state to cover their housing costs if they can simply make it to Massachusetts. This is putting massive pressure on our local housing stock,” said Craney.

“The other item that our state must pursue is to make it cheaper to develop homes in our state. Net zero mandates have made it prohibitively expensive to build and maintain new housing stock in the numbers that are required to deal with the pressures currently put on our local housing markets. We need to be making it easier for people to build new homes, not harder,” closed Craney. 

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