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HOUSE DOCKET, NO. 2857 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 2747
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Mike Connolly
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act granting a local option for a real estate transfer fee to fund affordable housing.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Mike Connolly26th Middlesex1/19/2023Lindsay N. Sabadosa1st Hampshire1/19/2023David Henry Argosky LeBoeuf17th Worcester1/26/2023Steven Owens29th Middlesex1/26/2023Christine P. Barber34th Middlesex1/27/2023Vanna Howard17th Middlesex1/30/2023Simon Cataldo14th Middlesex1/31/2023Carmine Lawrence Gentile13th Middlesex2/4/2023Samantha Montaño15th Suffolk2/6/2023Dylan A. FernandesBarnstable, Dukes and Nantucket2/7/2023James C. Arena-DeRosa8th Middlesex2/8/2023Tricia Farley-Bouvier2nd Berkshire2/9/2023James B. EldridgeMiddlesex and Worcester2/10/2023Susannah M. Whipps2nd Franklin2/14/2023Ruth B. Balser12th Middlesex2/14/2023Joanne M. ComerfordHampshire, Franklin and Worcester2/15/2023Jason M. LewisFifth Middlesex2/27/2023Natalie M. Higgins4th Worcester2/28/2023 2 of 2
Carlos González10th Hampden3/1/2023Michael D. BradySecond Plymouth and Norfolk3/9/2023 1 of 12
HOUSE DOCKET, NO. 2857 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 2747
By Representative Connolly of Cambridge, a petition (accompanied by bill, House, No. 2747) of
Mike Connolly and others for legislation to support affordable housing with a local option for a
fee to be applied to certain real estate transactions. Revenue.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act granting a local option for a real estate transfer fee to fund affordable housing.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 55C of Chapter 44 of the General Laws is hereby amended, in
2subsection (c), by inserting, in line 8, after the figure “44B” the following words: - “and section
355D of chapter 44”.
4 SECTION 2. Said section 55C of Chapter 44 of the General Laws is hereby amended by
5inserting, in line 45, after the word “revenue” the following words: - “provided further, that any
6such money received from section 55D shall be used exclusively for adaptive reuse, production
7or preservation of affordable housing or affordable housing purposes as that term is defined in
8section 55D”.
9 SECTION 3. Said section 55C of Chapter 44 of the General Laws is hereby amended, in
10subsection (d), in line 99, by inserting after the word “fee” the following words: - “, transfer fee”.
11 SECTION 4. Chapter 44 of the General Laws is hereby amended by inserting after
12section 55C the following section: 2 of 12
13 Section 55D. (a) Definitions: For purposes of this section, the following terms shall,
14unless the context clearly requires otherwise, have the following meanings:
15 “Affidavit of transfer fee”, an affidavit signed under the pains and penalties of perjury by
16the settlement agent that attests to (a) the true and complete purchase or sale price of the transfer
17of the real property interest; (b) the amount of the fee owed or the basis, if any, upon which the
18transfer is exempt from the fee imposed by said transfer; (c) the amount that the purchaser and
19seller are responsible for paying as required by the bylaw, ordinance or regulation allocating the
20transfer fee in accordance with this section; and (d) the obligation of the settlement agent to
21make payment of the transfer fee to the city, town or regional affordable housing commission.
22 “Affordable housing purposes” uses allowed by the municipal affordable housing trust
23fund or regional affordable housing commission fund into which funds are deposited hereunder.
24 “Affordable housing restriction", a recorded instrument held by a qualified holder which
25encumbers or restricts a real property interest so that the real property interest is perpetually or
26for a term of at least thirty years limited to use as a residence occupied by a low or moderate
27income household with Area Median Income, as defined by the federal department of Housing
28and Urban Development, not to exceed the income limits to which the Municipal Affordable
29Housing Trust Fund or Regional Affordable Housing Commission is subject. A “qualified
30holder” is a governmental body or charitable corporation or trust which qualifies under the terms
31of chapter 184 to hold an affordable housing restriction.
32 “Member cities and towns”, cities or towns that are members of a regional affordable
33housing commission. 3 of 12
34 “Municipal affordable housing trust fund”, a municipal affordable housing trust fund
35established pursuant to Section 55C of this chapter, or any other municipal trust fund established
36pursuant to a law of the commonwealth providing for the creation and preservation of affordable
37housing in a particular city or town.
38 "Purchaser", the transferee, grantee, or recipient of any real property interest.
39 "Purchase price" or “sale price,” all consideration paid or transferred by or on behalf of a
40purchaser to a seller or the seller’s nominee, or for the seller’s benefit, for the transfer of any real
41property interest, and shall include, but not be limited to: (i) all cash or its equivalent so paid or
42transferred; (ii) all cash or other property paid or transferred by or on behalf of the purchaser to
43discharge or reduce any obligation of the seller; (iii) the principal amount of all notes or their
44equivalent, or other deferred payments, given or promised to be given by or on behalf of the
45purchaser to the seller or the seller’s nominee; (iv) the outstanding balance of all obligations of
46the seller which are assumed by the purchaser or to which the real property interest transferred
47remains subject after the transfer, determined at the time of transfer, but excluding real estate
48taxes and other municipal liens or assessments which are not overdue at the time of transfer; (v)
49the fair market value, at the time of transfer, of any other consideration or thing of value paid or
50transferred by or on behalf of the purchaser, including, but not limited to, any property, goods or
51services paid, transferred or rendered in exchange for such real property interest.
52 "Real property interest", any present or future legal or equitable interest in or to real
53property, and any beneficial interest therein, including the interest of any beneficiary in a trust
54which holds any legal or equitable interest in real property, the interest of a partner or member in
55a partnership or limited liability company, the interest of a stockholder in a corporation, the 4 of 12
56interest of a holder of an option to purchase real property, the interest of a purchaser or seller
57under a contract for purchase and sale of real property, and the transferable development rights
58created under chapter 183A; but shall not include any interest which is limited to any of the
59following: the dominant estate in any easement or right of way; the right to enforce any
60restriction; any estate at will or at sufferance; any estate for years having a term of less than 30
61years; any reversionary right, condition, or right of entry for condition broken; and the interest of
62a mortgagee or other secured party in any mortgage or security agreement.
63 “Regional affordable housing commission”, a regional trust, bank, board or like entity
64created pursuant to general or special law for the creation and preservation of affordable housing
65as described in the general or special law establishing such entity, and whose membership
66includes two or more cities or towns. If a city or town is a member of a regional affordable
67housing commission, any authority granted to a city, town, or regional affordable housing
68commission pursuant to this Section shall be exercised solely by the regional affordable housing
69commission.
70 “Regional affordable housing commission fund” a fund established by general or special
71law for the use of a regional affordable housing commission for the creation and preservation of
72affordable housing as defined in the general or special law establishing such fund.
73 "Seller", the transferor, grantor, or immediate former owner of any real property interest.
74 “Settlement Agent”, an escrow agent, real estate attorney, or representative of a lender or
75title company that conducts the closing or settlement of the sale or transfer of a real property
76interest including the coordination of the attendance and document signing for all the parties,
77verification that each party to the transfer has performed their required responsibilities as 5 of 12
78outlined in the contract and the disbursement of all funds, along with the title and deed, to the
79appropriate parties after checking that all conditions are met at the close of the transfer
80transaction.
81 "Time of transfer", of any real property interest, shall mean the time at which such
82transfer is legally effective as between the parties thereto, and, in any event, with respect to a
83transfer evidenced by an instrument recorded with the appropriate registry of deeds or filed with
84the assistant recorder of the appropriate registry district, not later than the time of such recording
85or filing.
86 (b) Establishment and Requirements of a Transfer Fee. A city or town that has
87established a municipal affordable housing trust fund pursuant to section 55C or any other
88municipal affordable housing trust fund established by a law of the commonwealth providing for
89the creation and preservation of affordable housing in municipalities for the benefit of low and
90moderate income households or for the funding of community housing, as defined in and in
91accordance with chapter 44B, or a regional affordable housing commission, as applicable, may
92impose a fee upon the transfer of any real property interest in any real property situated in the
93city or town, or member cities and towns, as described and as subject to conditions and
94exemptions described herein.
95 (i) A city, town, or regional affordable housing commission, as applicable, may establish
96different transfer fees for categories of properties, defined by the tax classification and the value
97of a property; provided, however, that the fee shall be no less than .5 percent and no more than 2
98percent of the purchase price of such real property interest. 6 of 12
99 (ii) The city or town or regional affordable housing commission, as applicable, shall have
100the authority to designate whether the transfer fee shall be borne by the purchaser, the seller or
101how it will be allocated between the two.
102 (iii) A purchaser, seller, or settlement agent in advance of the time of transfer shall
103request and the city or town or regional affordable housing commission, as applicable, shall
104provide to a purchaser, seller or settlement agent in advance of the time of transfer a certificate
105indicating the dollar amount of the transfer fee owed based on the agreed upon purchase price as
106evidenced by an executed purchase and sale agreement, contract for sale or other document
107evidencing the agreed upon purchase price or that the transfer is exempt from the transfer fee,
108stating the basis for the exemption.
109 (iv) Whenever the transfer of a real property interest will occur at or about the same time
110as a conveyance of personalty related thereto, the allocations of payments between real estate
111and personalty agreed to by the purchaser and seller shall not determine the calculation of the
112transfer fee due pursuant to this section; instead, the calculation of the fee with respect to such
113transfer shall be determined by the city, town, or regional affordable housing commission, as
114applicable.
115 (v) The transfer fee shall be paid within seven days of the time of transfer by the
116settlement agent to the city or town, or its designee, or to the regional affordable housing
117commission or its designee, as applicable, and shall be accompanied by a copy of the deed or
118other instrument recorded or registered with the registry of deeds for the county in which the real
119property interest is located, or the assistant recorder for the registry district of the county in
120which the real property interest is located, and a copy of the affidavit of transfer fee. The city or 7 of 12
121town, or its designee, or the regional affordable housing commission, or its designee, as
122applicable, shall promptly thereafter execute and issue a certificate indicating that the appropriate
123fee has been paid.
124 (vi) Upon receipt of a transfer fee by a city or town, the treasurer of the city or town shall
125deposit the transfer fee in the city or town’s municipal affordable housing trust fund established
126pursuant to section 55C or any other municipal affordable housing trust fund established by a
127law of the commonwealth providing for the creation and preservation of affordable housing in
128municipalities for the benefit of low and moderate income households or for the funding of
129community housing, as defined in and in accordance with chapter 44B. Upon receipt of a transfer
130fee by a regional affordable housing commission, the regional affordable housing commission
131shall deposit the transfer fee into the regional affordable housing commission fund.
132 (c) Exemptions: The following transfers of real property interests shall be exempt from
133the fees established by this section; provided, however, that any city, town or regional affordable
134housing commission, as applicable, may adopt further exemptions in addition to those provided
135herein; provided, further, that except as otherwise required, the seller or purchaser or both
136parties, who are required to pay the transfer fee as specified in the bylaw or ordinance
137establishing a transfer fee pursuant to this Section, or, with respect to the member cities and
138towns of a regional affordable housing commission, regulations adopted by such regional
139affordable housing commission, shall have the burden of proving that any transfer is exempt; and
140provided, further, that any otherwise exempt transfer shall not be exempt in the event that such
141transfer, by itself or as part of a series of transfers, was made for the primary purpose of evading
142the fee established pursuant to this section. 8 of 12
143 (i) Transfers for less than $1,000,000 or such higher threshold amount as set by the
144municipality or regional affordable housing commission adopting a transfer fee pursuant to this
145legislation except to the extent that the median single family sale price for the county in which
146the municipality resides is less than $750,000 may adopt a threshold no lower than 100% of the
147median single family home sales price for that county. County median sales price for a single
148family home which shall be determined annually by April 1st of each calendar year by the
149department of housing and community development shall be exempt in their entirety; provided,
150however, that the amount of this threshold for imposing a transfer fee may be increased by the
151bylaw or ordinance establishing a transfer fee pursuant to this Section or, with respect to the
152member cities and towns of a regional affordable housing commission, a regulation adopted by
153the regional affordable housing commission;
154 (ii) Transfers made as gifts with consideration less than $100; provided, however, that in
155any proceedings to determine the amount of any fee due hereunder, it shall be presumed that any
156transfer for consideration of less than fair market value of the real property interest transferred
157was made as a gift without consideration to the extent of the difference between the fair market
158value of the real property interest transferred and the amount of consideration claimed by the
159purchaser to have been paid or transferred, if the seller shall have been at the time of transfer the
160spouse, the lineal descendant, or the lineal ancestor of the purchaser, by blood or adoption, and
161otherwise it shall be presumed that consideration was paid in an amount equal to the fair market
162value of the real property interest transferred, at the time of transfer;
163 (iii) Transfers to the government of the United States, the Commonwealth and any of
164their instrumentalities, agencies or subdivisions, including but not limited to transfers to the city, 9 of 12
165town, or regional housing commission, to the extent that the city, town or regional affordable
166housing commission has designated that the transfer fee shall be borne by the purchaser;
167 (iv) Transfers from the government of the United States, the Commonwealth and any of
168their instrumentalities, agencies, or subdivisions, including but not limited to transfers from the
169city, town or regional affordable housing commission, to the extent that the city, town or regional
170affordable housing commission has designated that the transfer fee shall be borne by the seller;
171 (v) Distributions by the trustees of a trust to the beneficiaries of such trust;
172 (vi) Transfers to the trustees of a trust in exchange for a beneficial interest received by the
173seller in such trust;
174 (vii) Transfers between family members as defined by bylaw or ordinance or regulations
175adopted by a regional affordable housing commission;
176 (viii) Transfers to first-time homebuyers as defined by bylaw, ordinance or regulations
177adopted by a municipality or regional affordable housing commission; provided that, said first-
178time homebuyer must be a natural person; and provided further, that for real property sold for a
179value that exceeds the median single family home price in the county where the transaction
180occurs, the exemption shall only apply to the value equal to the median single family home price
181in said county; provided that any municipality or region may elect to increase said exemption.
182 (ix) Transfers which, without additional consideration, confirm, correct, modify, or
183supplement a transfer previously made; 10 of 12
184 (x) Transfers by operation of law without actual consideration, including but not limited
185to transfers occurring by virtue of the death or bankruptcy of the owner of a real property
186interest;
187 (xi) Transfers made in partition of land and improvements thereto, under chapter 241;
188 (xii) Transfers to any charitable organization, as defined in clause Third of section 5 of
189chapter 59, or any religious organization; provided, however, that the real property interest so
190transferred will be held by the charitable or religious organization solely for affordable housing-
191related uses that are consistent with the uses allowed by the regional affordable housing
192commission fund, if one exists, or the municipality’s affordable housing trust fund; and provided,
193further, that such uses must be available to the general public;
194 (xiii) Transfers to a mortgagee in foreclosure of the mortgage held by such mortgagee,
195and transfers of the property subject to a mortgage to the mortgagee in consideration of the
196forbearance of the mortgagee from foreclosing said mortgage;
197 (xiv) Transfers consisting of the division of marital assets under the provisions of section
19834 of chapter 208 or other provisions of law; and
199 (xv) Transfers of a real property interest that include one or more residential units
200governed by affordable housing restrictions; provided, however, that the fee imposed under the
201provisions of this Section shall be proportionately reduced based on the assessed value of
202residential units subject to affordable housing restrictions as compared to the total assessed value
203of the property, or the percentage of residential units subject to affordable housing restrictions, as
204compared to the total number of units located on that property, or such other method as may be
205required by the bylaw, ordinance, warrant article or other local law establishing a transfer fee 11 of 12
206pursuant to this section or, with respect to member cities and towns of a regional affordable
207housing omission, a regulation adopted by the regional affordable housing commission.
208 (d) Accounting: The city or town’s treasurer shall keep a full and accurate account
209stating when, from or to whom, and on what account money has been paid or received relative to
210the activities of the municipal affordable housing trust fund. With respect to a regional
211affordable housing commission, the regional affordable housing commission’s treasurer or such
212other person as may be designated in the law establishing the regional affordable housing
213commission, shall keep a full and accurate account stating when, from or to whom, and on what
214account money has been paid or received relating to the regional affordable housing commission
215fund.
216 (e) Implementation and Enforcement: (i) The adoption of any non-mandatory exemptions
217shall be determined by a majority vote by the city or town’s legislative body or, with respect to a
218regional affordable housing commission, by the terms of or in accordance with the procedures
219established by the general or special law creating such commission.
220 (ii) A city or town that establishes a transfer fee pursuant to this Section, or a regional
221affordable housing commission that receives funds hereunder may provide for the collection and
222liening of any outstanding transfer fee. Such city, town or regional affordable housing
223commission shall have the same remedies to collect said amount as provided by law with respect
224to the collection of real property taxes.
225 (iii) A city or town enacting a real estate transfer fee pursuant to this Section, or a
226regional affordable housing commission that receives funds hereunder, is authorized to issue
227rules, policies, and procedures to effectuate its terms. 12 of 12
228 (iv) A city or town that adopts this Section, or a regional affordable housing commission
229that receives funds hereunder shall provide to the Regional Planning Office publicly available
230reports on the total fees collected and disbursed in accordance with this Section.