Enabling a local option empty homes tax on vacant units in residential buildings
If enacted, this bill will significantly affect state and local laws concerning property taxation and housing. It will establish a framework for municipalities to actively manage vacant residential properties, thereby potentially easing housing shortages by encouraging owners to either rent out or sell properties that would otherwise remain empty. Additionally, the implementation of this tax is expected to generate revenue that could be reinvested into community housing initiatives and services. By allowing localized control and decision-making, the law seeks to address specific residential needs within each city and town.
House Bill 3660 seeks to empower cities and towns in Massachusetts to impose a local option empty homes tax on vacant residential units. The bill defines a 'vacant residential unit' as either a unit that has been unoccupied for at least 90 consecutive days or a newly constructed unit that remains unrented 90 days after receiving a certificate of occupancy. This local tax allows municipalities to apply a 12.5% excise tax on the annualized last agreed-upon rental rate for each qualifying vacant unit or a rate set by the municipality itself. The aim is to incentivize the occupancy of homes and address the issue of housing scarcity.
While the bill has garnered support for its potential to improve housing availability, it may also face criticism from property owners and developers who could argue that such a tax penalizes them for economic hardships or market fluctuations that prevent occupancy. There may be concerns regarding the administrative burden on local governments to enforce the tax, register properties, and track compliance. Thus, the debate surrounding H3660 may intensify around issues of fairness, local governance, and effective housing policy.