Massachusetts Gov. Maura Healey is proposing a new “mansion tax” strategy to fund the state’s affordable housing endeavors.
According to combined media reports, Healey’s recently proposed $4 billion housing bond bill would enable cities to enact a transfer fee ranging from 0.5% to 2% on property sales greater than $1 million. The money raised from this new tax would be channeled into state-sponsored affordable housing projects.
According to Zillow, the average Massachusetts home value is $612,509, up 8.7% over the past year.
State Housing Secretary Edward Augustus said 200,000 more homes are needed to correct the supply and demand imbalance. In a statement, Augustus claimed, “This policy is a win for local governments, but most importantly it is a win for renters and homeowners who have otherwise been priced out.”
While some municipal leaders welcomed the proposal, tax hikes on residential properties may not be welcomed by homeowners. Last month, Boston Mayor Michelle Wu proposed a temporary tax hike on commercial properties to fund the city’s budget gap – Wu stated she wanted to avoid raising taxes on residential properties in Boston, where the median home price is $960,000.
Healey’s proposal will need to be approved as part of the state’s budget for fiscal year 2025, which is currently before the Massachusetts legislature.
