Rep. Connolly's Real Estate Transfer Fee Bill to be heard on Tuesday

On Tuesday, October 31, the legislature's Joint Committee on Municipalities and Regional Government will hear bills relating to municipal powers and duties, including H.3512, legislation filed by Representative Mike Connolly. This Bill would provide cities and towns with the option of implementing a small fee on certain real estate transactions, with all proceeds going to a municipality's Affordable Housing Trust fund. The hearing will occur at 11 am in Room A-1 at the State House. 

"In the Cambridge and Somerville neighborhoods that I represent, we are witnessing a real estate development boom of historic proportions," Rep Connolly said. "Overall, this is a positive sign, as it means people want to be a part of our community. But in this time of profound wealth and income inequality, it is clear that more funds are needed to protect and expand upon our stock of affordable housing, and that is why I am introducing this legislation to provide cities and towns with an additional tool to help fund local affordable housing programs," Rep. Connolly added.

Rep. Connolly filed the transfer fee legislation in January, and since that time, he has been working with local stakeholders, advocates, and other elected officials to build consensus on the parameters of the bill. The bill is being co-sponsored by more than a dozen other legislators, including State Senators Sal DiDominico and Pat Jehlen and Representatives Christine Barber, Marjorie Decker, and Denise Provost.

In Somerville, the transfer fee was recommended by the Sustainable Neighborhoods Working Group, a 26-member panel formed by Mayor Joe Curtatone that included residents, affordable housing experts, and finance and real estate professionals. As a result of this recommendation, a transfer fee working group was formed, and Rep. Connolly has joined with other members of the Somerville legislative delegation to discuss the proposal with working group members.

Meanwhile, in Cambridge, the City Council recently adopted a policy order in support of Rep. Connolly's bill, and they also requested that the City Administration further explore the potential for a transfer fee home rule petition. For his part, Rep. Connolly also recently met with Cambridge Mayor E. Denise Simmons and City Manager Louie DePasquale to discuss the transfer fee proposal.

As a result of these and other conversations, Rep. Connolly will be introducing a proposed amended version of the bill at tomorrow's hearing. This proposed amended version would enable municipalities to "impose a fee or range of fees between .5 percent and 2 percent of the purchase price of real property," and it would also allow municipalities to exempt certain transactions (should it choose to do so). Possibilities for exemptions include senior citizens, low-income purchasers, or transfers to family members.

Anyone wishing to speak in support of the proposed amended version of H.3512 is invited to sign up outside room A-1 at 11 am tomorrow, or contact our office with anyone questions.

The full text of the amended version of the bill is as follows:


An Act supporting affordable housing with a local option for a fee to be applied to certain real estate transactions. Chapter 40 of the General Law is hereby amending by adding the following section:

Section 70 (a) A city or town which accepts this section and has established a Municipal Affordable Housing Trust Fund pursuant to section 55C of chapter 44, Chapter 482 of the Acts of 1991, or other municipally established Affordable Housing Trust Fund may impose a fee or range of fees between .5 percent and 2 percent of the purchase price of real property; provided, however, that no such fee shall be imposed on: (i) transfers to the government of the United States or any instrumentality, agency of subdivision thereof, or the commonwealth or any instrumentality or subdivision thereof ; or (ii) transfers to any charitable organization as defined in the third clause of Section 5 of chapter 59. 

            (b) Any city or town adopting a real estate transfer fee pursuant to this Section shall have the authority to establish one or more exemptions from such fee should it choose to do so.  Exemptions may include, but are not limited to (i) seniors age 62 or older; (ii) purchasers with annual income below 80% of Area Median Income as established by the U.S. Department of Housing and Urban Developed for that city or town; (iii) residential transfers with a purchase price below the mean purchase price for the city or town over the previous twelve month period; and (iv) transfers between family members as defined by the city or town.

            (c) The fee shall be paid to the city or town and shall be accompanied by a copy of the deed or other instrument evidencing such transfer, and an affidavit signed under oath or under the pains and penalties or perjury by the purchaser and seller attesting to the purchase price and the basis, if any, upon which the transfer is claimed to be exempt in whole or in part from said fee. The city or town, or the designee, shall promptly thereafter issue a certificate indicate that the fee has been paid or that the transfer is exempt from the fee.

            (d) Upon receipt of the fee pursuant to subsection (c) above, the treasurer of the city or town shall transfer the funds to the Municipal Affordable Housing Trust Fund, established pursuant to said section 55C of said chapter 44.

            (e) The register of deeds for the county in which the real property is located shall not record or register a deed unless the deed is accompanied by a certificate issued pursuant to subsection (c).