Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H2747 Compare Versions

Only one version of the bill is available at this time.

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2	2	HOUSE DOCKET, NO. 2857 FILED ON: 1/19/2023
3	3	HOUSE . . . . . . . . . . . . . . . No. 2747
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Mike Connolly
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act granting a local option for a real estate transfer fee to fund affordable housing.
13	13	_______________
14	14	PETITION OF:
15	15	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
16	16	Carlos González10th Hampden3/1/2023Michael D. BradySecond Plymouth and Norfolk3/9/2023 1 of 12
17	17	HOUSE DOCKET, NO. 2857 FILED ON: 1/19/2023
18	18	HOUSE . . . . . . . . . . . . . . . No. 2747
19	19	By Representative Connolly of Cambridge, a petition (accompanied by bill, House, No. 2747) of
20	20	Mike Connolly and others for legislation to support affordable housing with a local option for a
21	21	fee to be applied to certain real estate transactions. Revenue.
22	22	The Commonwealth of Massachusetts
23	23	_______________
24	24	In the One Hundred and Ninety-Third General Court
25	25	(2023-2024)
26	26	_______________
27	27	An Act granting a local option for a real estate transfer fee to fund affordable housing.
28	28	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
29	29	of the same, as follows:
30	30	1 SECTION 1. Section 55C of Chapter 44 of the General Laws is hereby amended, in
31	31	2subsection (c), by inserting, in line 8, after the figure “44B” the following words: - “and section
32	32	355D of chapter 44”.
33	33	4 SECTION 2. Said section 55C of Chapter 44 of the General Laws is hereby amended by
34	34	5inserting, in line 45, after the word “revenue” the following words: - “provided further, that any
35	35	6such money received from section 55D shall be used exclusively for adaptive reuse, production
36	36	7or preservation of affordable housing or affordable housing purposes as that term is defined in
37	37	8section 55D”.
38	38	9 SECTION 3. Said section 55C of Chapter 44 of the General Laws is hereby amended, in
39	39	10subsection (d), in line 99, by inserting after the word “fee” the following words: - “, transfer fee”.
40	40	11 SECTION 4. Chapter 44 of the General Laws is hereby amended by inserting after
41	41	12section 55C the following section: 2 of 12
42	42	13 Section 55D. (a) Definitions: For purposes of this section, the following terms shall,
43	43	14unless the context clearly requires otherwise, have the following meanings:
44	44	15 “Affidavit of transfer fee”, an affidavit signed under the pains and penalties of perjury by
45	45	16the settlement agent that attests to (a) the true and complete purchase or sale price of the transfer
46	46	17of the real property interest; (b) the amount of the fee owed or the basis, if any, upon which the
47	47	18transfer is exempt from the fee imposed by said transfer; (c) the amount that the purchaser and
48	48	19seller are responsible for paying as required by the bylaw, ordinance or regulation allocating the
49	49	20transfer fee in accordance with this section; and (d) the obligation of the settlement agent to
50	50	21make payment of the transfer fee to the city, town or regional affordable housing commission.
51	51	22 “Affordable housing purposes” uses allowed by the municipal affordable housing trust
52	52	23fund or regional affordable housing commission fund into which funds are deposited hereunder.
53	53	24 “Affordable housing restriction", a recorded instrument held by a qualified holder which
54	54	25encumbers or restricts a real property interest so that the real property interest is perpetually or
55	55	26for a term of at least thirty years limited to use as a residence occupied by a low or moderate
56	56	27income household with Area Median Income, as defined by the federal department of Housing
57	57	28and Urban Development, not to exceed the income limits to which the Municipal Affordable
58	58	29Housing Trust Fund or Regional Affordable Housing Commission is subject. A “qualified
59	59	30holder” is a governmental body or charitable corporation or trust which qualifies under the terms
60	60	31of chapter 184 to hold an affordable housing restriction.
61	61	32 “Member cities and towns”, cities or towns that are members of a regional affordable
62	62	33housing commission. 3 of 12
63	63	34 “Municipal affordable housing trust fund”, a municipal affordable housing trust fund
64	64	35established pursuant to Section 55C of this chapter, or any other municipal trust fund established
65	65	36pursuant to a law of the commonwealth providing for the creation and preservation of affordable
66	66	37housing in a particular city or town.
67	67	38 "Purchaser", the transferee, grantee, or recipient of any real property interest.
68	68	39 "Purchase price" or “sale price,” all consideration paid or transferred by or on behalf of a
69	69	40purchaser to a seller or the seller’s nominee, or for the seller’s benefit, for the transfer of any real
70	70	41property interest, and shall include, but not be limited to: (i) all cash or its equivalent so paid or
71	71	42transferred; (ii) all cash or other property paid or transferred by or on behalf of the purchaser to
72	72	43discharge or reduce any obligation of the seller; (iii) the principal amount of all notes or their
73	73	44equivalent, or other deferred payments, given or promised to be given by or on behalf of the
74	74	45purchaser to the seller or the seller’s nominee; (iv) the outstanding balance of all obligations of
75	75	46the seller which are assumed by the purchaser or to which the real property interest transferred
76	76	47remains subject after the transfer, determined at the time of transfer, but excluding real estate
77	77	48taxes and other municipal liens or assessments which are not overdue at the time of transfer; (v)
78	78	49the fair market value, at the time of transfer, of any other consideration or thing of value paid or
79	79	50transferred by or on behalf of the purchaser, including, but not limited to, any property, goods or
80	80	51services paid, transferred or rendered in exchange for such real property interest.
81	81	52 "Real property interest", any present or future legal or equitable interest in or to real
82	82	53property, and any beneficial interest therein, including the interest of any beneficiary in a trust
83	83	54which holds any legal or equitable interest in real property, the interest of a partner or member in
84	84	55a partnership or limited liability company, the interest of a stockholder in a corporation, the 4 of 12
85	85	56interest of a holder of an option to purchase real property, the interest of a purchaser or seller
86	86	57under a contract for purchase and sale of real property, and the transferable development rights
87	87	58created under chapter 183A; but shall not include any interest which is limited to any of the
88	88	59following: the dominant estate in any easement or right of way; the right to enforce any
89	89	60restriction; any estate at will or at sufferance; any estate for years having a term of less than 30
90	90	61years; any reversionary right, condition, or right of entry for condition broken; and the interest of
91	91	62a mortgagee or other secured party in any mortgage or security agreement.
92	92	63 “Regional affordable housing commission”, a regional trust, bank, board or like entity
93	93	64created pursuant to general or special law for the creation and preservation of affordable housing
94	94	65as described in the general or special law establishing such entity, and whose membership
95	95	66includes two or more cities or towns. If a city or town is a member of a regional affordable
96	96	67housing commission, any authority granted to a city, town, or regional affordable housing
97	97	68commission pursuant to this Section shall be exercised solely by the regional affordable housing
98	98	69commission.
99	99	70 “Regional affordable housing commission fund” a fund established by general or special
100	100	71law for the use of a regional affordable housing commission for the creation and preservation of
101	101	72affordable housing as defined in the general or special law establishing such fund.
102	102	73 "Seller", the transferor, grantor, or immediate former owner of any real property interest.
103	103	74 “Settlement Agent”, an escrow agent, real estate attorney, or representative of a lender or
104	104	75title company that conducts the closing or settlement of the sale or transfer of a real property
105	105	76interest including the coordination of the attendance and document signing for all the parties,
106	106	77verification that each party to the transfer has performed their required responsibilities as 5 of 12
107	107	78outlined in the contract and the disbursement of all funds, along with the title and deed, to the
108	108	79appropriate parties after checking that all conditions are met at the close of the transfer
109	109	80transaction.
110	110	81 "Time of transfer", of any real property interest, shall mean the time at which such
111	111	82transfer is legally effective as between the parties thereto, and, in any event, with respect to a
112	112	83transfer evidenced by an instrument recorded with the appropriate registry of deeds or filed with
113	113	84the assistant recorder of the appropriate registry district, not later than the time of such recording
114	114	85or filing.
115	115	86 (b) Establishment and Requirements of a Transfer Fee. A city or town that has
116	116	87established a municipal affordable housing trust fund pursuant to section 55C or any other
117	117	88municipal affordable housing trust fund established by a law of the commonwealth providing for
118	118	89the creation and preservation of affordable housing in municipalities for the benefit of low and
119	119	90moderate income households or for the funding of community housing, as defined in and in
120	120	91accordance with chapter 44B, or a regional affordable housing commission, as applicable, may
121	121	92impose a fee upon the transfer of any real property interest in any real property situated in the
122	122	93city or town, or member cities and towns, as described and as subject to conditions and
123	123	94exemptions described herein.
124	124	95 (i) A city, town, or regional affordable housing commission, as applicable, may establish
125	125	96different transfer fees for categories of properties, defined by the tax classification and the value
126	126	97of a property; provided, however, that the fee shall be no less than .5 percent and no more than 2
127	127	98percent of the purchase price of such real property interest. 6 of 12
128	128	99 (ii) The city or town or regional affordable housing commission, as applicable, shall have
129	129	100the authority to designate whether the transfer fee shall be borne by the purchaser, the seller or
130	130	101how it will be allocated between the two.
131	131	102 (iii) A purchaser, seller, or settlement agent in advance of the time of transfer shall
132	132	103request and the city or town or regional affordable housing commission, as applicable, shall
133	133	104provide to a purchaser, seller or settlement agent in advance of the time of transfer a certificate
134	134	105indicating the dollar amount of the transfer fee owed based on the agreed upon purchase price as
135	135	106evidenced by an executed purchase and sale agreement, contract for sale or other document
136	136	107evidencing the agreed upon purchase price or that the transfer is exempt from the transfer fee,
137	137	108stating the basis for the exemption.
138	138	109 (iv) Whenever the transfer of a real property interest will occur at or about the same time
139	139	110as a conveyance of personalty related thereto, the allocations of payments between real estate
140	140	111and personalty agreed to by the purchaser and seller shall not determine the calculation of the
141	141	112transfer fee due pursuant to this section; instead, the calculation of the fee with respect to such
142	142	113transfer shall be determined by the city, town, or regional affordable housing commission, as
143	143	114applicable.
144	144	115 (v) The transfer fee shall be paid within seven days of the time of transfer by the
145	145	116settlement agent to the city or town, or its designee, or to the regional affordable housing
146	146	117commission or its designee, as applicable, and shall be accompanied by a copy of the deed or
147	147	118other instrument recorded or registered with the registry of deeds for the county in which the real
148	148	119property interest is located, or the assistant recorder for the registry district of the county in
149	149	120which the real property interest is located, and a copy of the affidavit of transfer fee. The city or 7 of 12
150	150	121town, or its designee, or the regional affordable housing commission, or its designee, as
151	151	122applicable, shall promptly thereafter execute and issue a certificate indicating that the appropriate
152	152	123fee has been paid.
153	153	124 (vi) Upon receipt of a transfer fee by a city or town, the treasurer of the city or town shall
154	154	125deposit the transfer fee in the city or town’s municipal affordable housing trust fund established
155	155	126pursuant to section 55C or any other municipal affordable housing trust fund established by a
156	156	127law of the commonwealth providing for the creation and preservation of affordable housing in
157	157	128municipalities for the benefit of low and moderate income households or for the funding of
158	158	129community housing, as defined in and in accordance with chapter 44B. Upon receipt of a transfer
159	159	130fee by a regional affordable housing commission, the regional affordable housing commission
160	160	131shall deposit the transfer fee into the regional affordable housing commission fund.
161	161	132 (c) Exemptions: The following transfers of real property interests shall be exempt from
162	162	133the fees established by this section; provided, however, that any city, town or regional affordable
163	163	134housing commission, as applicable, may adopt further exemptions in addition to those provided
164	164	135herein; provided, further, that except as otherwise required, the seller or purchaser or both
165	165	136parties, who are required to pay the transfer fee as specified in the bylaw or ordinance
166	166	137establishing a transfer fee pursuant to this Section, or, with respect to the member cities and
167	167	138towns of a regional affordable housing commission, regulations adopted by such regional
168	168	139affordable housing commission, shall have the burden of proving that any transfer is exempt; and
169	169	140provided, further, that any otherwise exempt transfer shall not be exempt in the event that such
170	170	141transfer, by itself or as part of a series of transfers, was made for the primary purpose of evading
171	171	142the fee established pursuant to this section. 8 of 12
172	172	143 (i) Transfers for less than $1,000,000 or such higher threshold amount as set by the
173	173	144municipality or regional affordable housing commission adopting a transfer fee pursuant to this
174	174	145legislation except to the extent that the median single family sale price for the county in which
175	175	146the municipality resides is less than $750,000 may adopt a threshold no lower than 100% of the
176	176	147median single family home sales price for that county. County median sales price for a single
177	177	148family home which shall be determined annually by April 1st of each calendar year by the
178	178	149department of housing and community development shall be exempt in their entirety; provided,
179	179	150however, that the amount of this threshold for imposing a transfer fee may be increased by the
180	180	151bylaw or ordinance establishing a transfer fee pursuant to this Section or, with respect to the
181	181	152member cities and towns of a regional affordable housing commission, a regulation adopted by
182	182	153the regional affordable housing commission;
183	183	154 (ii) Transfers made as gifts with consideration less than $100; provided, however, that in
184	184	155any proceedings to determine the amount of any fee due hereunder, it shall be presumed that any
185	185	156transfer for consideration of less than fair market value of the real property interest transferred
186	186	157was made as a gift without consideration to the extent of the difference between the fair market
187	187	158value of the real property interest transferred and the amount of consideration claimed by the
188	188	159purchaser to have been paid or transferred, if the seller shall have been at the time of transfer the
189	189	160spouse, the lineal descendant, or the lineal ancestor of the purchaser, by blood or adoption, and
190	190	161otherwise it shall be presumed that consideration was paid in an amount equal to the fair market
191	191	162value of the real property interest transferred, at the time of transfer;
192	192	163 (iii) Transfers to the government of the United States, the Commonwealth and any of
193	193	164their instrumentalities, agencies or subdivisions, including but not limited to transfers to the city, 9 of 12
194	194	165town, or regional housing commission, to the extent that the city, town or regional affordable
195	195	166housing commission has designated that the transfer fee shall be borne by the purchaser;
196	196	167 (iv) Transfers from the government of the United States, the Commonwealth and any of
197	197	168their instrumentalities, agencies, or subdivisions, including but not limited to transfers from the
198	198	169city, town or regional affordable housing commission, to the extent that the city, town or regional
199	199	170affordable housing commission has designated that the transfer fee shall be borne by the seller;
200	200	171 (v) Distributions by the trustees of a trust to the beneficiaries of such trust;
201	201	172 (vi) Transfers to the trustees of a trust in exchange for a beneficial interest received by the
202	202	173seller in such trust;
203	203	174 (vii) Transfers between family members as defined by bylaw or ordinance or regulations
204	204	175adopted by a regional affordable housing commission;
205	205	176 (viii) Transfers to first-time homebuyers as defined by bylaw, ordinance or regulations
206	206	177adopted by a municipality or regional affordable housing commission; provided that, said first-
207	207	178time homebuyer must be a natural person; and provided further, that for real property sold for a
208	208	179value that exceeds the median single family home price in the county where the transaction
209	209	180occurs, the exemption shall only apply to the value equal to the median single family home price
210	210	181in said county; provided that any municipality or region may elect to increase said exemption.
211	211	182 (ix) Transfers which, without additional consideration, confirm, correct, modify, or
212	212	183supplement a transfer previously made; 10 of 12
213	213	184 (x) Transfers by operation of law without actual consideration, including but not limited
214	214	185to transfers occurring by virtue of the death or bankruptcy of the owner of a real property
215	215	186interest;
216	216	187 (xi) Transfers made in partition of land and improvements thereto, under chapter 241;
217	217	188 (xii) Transfers to any charitable organization, as defined in clause Third of section 5 of
218	218	189chapter 59, or any religious organization; provided, however, that the real property interest so
219	219	190transferred will be held by the charitable or religious organization solely for affordable housing-
220	220	191related uses that are consistent with the uses allowed by the regional affordable housing
221	221	192commission fund, if one exists, or the municipality’s affordable housing trust fund; and provided,
222	222	193further, that such uses must be available to the general public;
223	223	194 (xiii) Transfers to a mortgagee in foreclosure of the mortgage held by such mortgagee,
224	224	195and transfers of the property subject to a mortgage to the mortgagee in consideration of the
225	225	196forbearance of the mortgagee from foreclosing said mortgage;
226	226	197 (xiv) Transfers consisting of the division of marital assets under the provisions of section
227	227	19834 of chapter 208 or other provisions of law; and
228	228	199 (xv) Transfers of a real property interest that include one or more residential units
229	229	200governed by affordable housing restrictions; provided, however, that the fee imposed under the
230	230	201provisions of this Section shall be proportionately reduced based on the assessed value of
231	231	202residential units subject to affordable housing restrictions as compared to the total assessed value
232	232	203of the property, or the percentage of residential units subject to affordable housing restrictions, as
233	233	204compared to the total number of units located on that property, or such other method as may be
234	234	205required by the bylaw, ordinance, warrant article or other local law establishing a transfer fee 11 of 12
235	235	206pursuant to this section or, with respect to member cities and towns of a regional affordable
236	236	207housing omission, a regulation adopted by the regional affordable housing commission.
237	237	208 (d) Accounting: The city or town’s treasurer shall keep a full and accurate account
238	238	209stating when, from or to whom, and on what account money has been paid or received relative to
239	239	210the activities of the municipal affordable housing trust fund. With respect to a regional
240	240	211affordable housing commission, the regional affordable housing commission’s treasurer or such
241	241	212other person as may be designated in the law establishing the regional affordable housing
242	242	213commission, shall keep a full and accurate account stating when, from or to whom, and on what
243	243	214account money has been paid or received relating to the regional affordable housing commission
244	244	215fund.
245	245	216 (e) Implementation and Enforcement: (i) The adoption of any non-mandatory exemptions
246	246	217shall be determined by a majority vote by the city or town’s legislative body or, with respect to a
247	247	218regional affordable housing commission, by the terms of or in accordance with the procedures
248	248	219established by the general or special law creating such commission.
249	249	220 (ii) A city or town that establishes a transfer fee pursuant to this Section, or a regional
250	250	221affordable housing commission that receives funds hereunder may provide for the collection and
251	251	222liening of any outstanding transfer fee. Such city, town or regional affordable housing
252	252	223commission shall have the same remedies to collect said amount as provided by law with respect
253	253	224to the collection of real property taxes.
254	254	225 (iii) A city or town enacting a real estate transfer fee pursuant to this Section, or a
255	255	226regional affordable housing commission that receives funds hereunder, is authorized to issue
256	256	227rules, policies, and procedures to effectuate its terms. 12 of 12
257	257	228 (iv) A city or town that adopts this Section, or a regional affordable housing commission
258	258	229that receives funds hereunder shall provide to the Regional Planning Office publicly available
259	259	230reports on the total fees collected and disbursed in accordance with this Section.