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HOUSE DOCKET, NO. 4135 FILED ON: 2/3/2023
HOUSE . . . . . . . . . . . . . . . No. 4151
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Dylan A. Fernandes
_________________
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 authorizing the town of Nantucket to impose a real estate transfer fee for affordable and
workforce housing.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Dylan A. FernandesBarnstable, Dukes and Nantucket2/3/2023Julian CyrCape and Islands2/3/2023 1 of 13
HOUSE DOCKET, NO. 4135 FILED ON: 2/3/2023
HOUSE . . . . . . . . . . . . . . . No. 4151
By Representative Fernandes of Falmouth, a petition (subject to Joint Rule 7B) of Dylan A.
Fernandes and Julian Cyr relative to authorizing the town of Nantucket to impose a real estate
transfer fee for affordable and workforce housing. Revenue.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 4201 OF 2021-2022.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act authorizing the town of Nantucket to impose a real estate transfer fee for affordable and
workforce 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. For purposes of this act, the words and phrases set forth in this section shall
2have the following meanings:
3 “Affordable Housing Restriction" is a recorded instrument held by a qualified holder
4which encumbers and/or restricts a real property interest so that the real property interest is
5perpetually or for a term of at least thirty (30) years limited to use as a residence occupied by a
6low or moderate income household which earns less than a specified income level, the upper
7limit of which may not exceed one hundred seventy-five percent (175%) of the Nantucket
8median income. A “qualified holder” is a governmental body or charitable corporation or trust
9which qualifies under the terms of Massachusetts General Laws Chapter 184 (“Chapter 184”) to 2 of 13
10hold an affordable housing restriction. Without limiting the generality of the foregoing,
11“Affordable Housing Restriction” includes but is not limited to any instrument which conforms
12to the requirements of (i) a Nantucket Housing Needs Covenant as described in Chapter 301 of
13the Acts of 2002 and defined in the Town of Nantucket Code.
14 "Eligible Applicants", shall refer to non-profit and for-profit corporations and
15organizations, individuals, and public entities.
16 "Purchaser", shall refer to the transferee, grantee or recipient of any real property interest.
17 "Purchase price", all consideration paid or transferred by or on behalf of a purchaser to a
18seller or his nominee, or for his benefit, for the transfer of any real property interest, and shall
19include, but not be limited to, all cash or its equivalent so paid or transferred; all cash or other
20property paid or transferred by or on behalf of the purchaser to discharge or reduce any
21obligation of the seller; the principal amount of all notes or their equivalent, or other deferred
22payments, given or promised to be given by or on behalf of the purchaser to the seller or his
23nominee; the outstanding balance of all obligations of the seller which are assumed by the
24purchaser or to which the real property interest transferred remains subject after the transfer,
25determined at the time of transfer, but excluding real estate taxes and other municipal liens or
26assessments which are not overdue at the time of transfer; the fair market value, at the time of
27transfer, of any other consideration or thing of value paid or transferred by or on behalf of the
28purchaser, including, but not limited to, any property, goods or services paid, transferred or
29rendered in exchange for such real property interest.
30 "Real property interest", shall refer to any present or future legal or equitable interest in
31or to real property, and any beneficial interest therein, including the interest of any beneficiary in 3 of 13
32a trust which holds any legal or equitable interest in real property, the interest of a partner or
33member in a partnership or limited liability company, the interest of a stockholder in a
34corporation, the interest of a holder of an option to purchase real property, the interest of a buyer
35or seller under a contract for purchase and sale of real property, and the transferable development
36rights created under chapter 183A of the General Laws; but shall not include any interest which
37is limited to any of the following: the dominant estate in any easement or right of way; the right
38to enforce any restriction; any estate at will or at sufferance; any estate for years having a term of
39less than 30 years; any reversionary right, condition, or right of entry for condition broken; and
40the interest of a mortgagee or other secured party in any mortgage or security agreement.
41 "Seller", shall refer to the transferor, grantor or immediate former owner of any real
42property interest.
43 "Time of transfer" of any real property interest shall mean the time at which such transfer
44is legally effective as between the parties thereto, and, in any event, with respect to a transfer
45evidenced by an instrument recorded with the appropriate registry of deeds or filed with the
46assistant recorder of the appropriate registry district, not later than the time of such recording or
47filing.
48 “Town” shall refer to the Town of Nantucket acting by and through the Board of
49Selectmen.
50 SECTION 2. There is hereby imposed a fee equal to one half per cent (1/2%) of the
51purchase price upon the transfer of any real property interest in any real property situated in
52Nantucket County. Said fee shall be the liability of the seller of such real property interest, and
53any agreement between the purchaser and the seller or any other person with reference to the 4 of 13
54allocation of the responsibility for bearing said fee shall not affect such liability of the seller. The
55fee shall be paid to the Town of Nantucket, or its designee, and shall be accompanied by a copy
56of the deed or other instrument evidencing such transfer, if any, and an affidavit signed under
57oath or under the pains and penalties of perjury by the purchaser or his legal representative and
58the seller or his legal representative, attesting to the true and complete purchase price and the
59basis, if any, upon which the transfer is claimed to be exempt in whole or in part from the fee
60imposed hereby. The Town, or its designee, shall promptly thereafter execute and issue a
61certificate indicating that the appropriate fee has been paid or that the transfer is exempt from the
62fee, stating the basis for the exemption. The register of deeds for Nantucket County, and the
63assistant recorder for the registry district of Nantucket County, shall not record or register, or
64receive or accept for recording or registration, any deed, except a mortgage deed, to which has
65not been affixed such a certificate executed by the Town or its designee. Failure to comply with
66this requirement shall not affect the validity of any instrument. The Town shall deposit all fees
67received hereunder with the Town treasurer. The treasurer shall deposit such fees in the
68Affordable Housing Trust Fund. The fee imposed hereunder shall be due simultaneously with the
69time of transfer of the transfer upon which it is imposed. Notwithstanding the foregoing,
70whenever there is a conveyance of real property interests and a conveyance of personalty related
71thereto at or about the same time, the allocations of payments between real estate and personalty
72agreed to by the purchaser and seller shall not determine the amount of the fee due pursuant to
73this section; instead, the Town may require payment of the fee referred to in real property
74interests so conveyed as determined by the Town.
75 SECTION 3. At any time within seven days following the issuance of the certificate of
76payment of the fee imposed by section two, the seller or his legal representative may return said 5 of 13
77certificate to the Town or its designee for cancellation, together with an affidavit signed under
78oath or under the pains and penalties of perjury that the transfer, with respect to which such
79certificate was issued, has not been consummated, and thereupon the fee paid with respect to
80such transfer shall be forthwith returned to the seller or his legal representative.
81 SECTION 4. The following transfers of real property interests shall be exempt from the
82fee established by section 10. Except as otherwise provided, the seller shall have the burden of
83proof that any transfer is exempt under this section and any otherwise exempt transfer shall not
84be exempt in the event that such transfer (by itself or as part of a series of transfers) was made
85for the primary purpose of evading the fee imposed by Section 10.
86 (a) Transfers to the government of the United States, the commonwealth, and any of their
87instrumentalities, agencies or subdivisions, including but not limited to transfers to the Town of
88Nantucket, the County of Nantucket.
89 (b) Transfers which, without additional consideration, confirm, correct, modify or
90supplement a transfer previously made.
91 (c) Transfers made as gifts without consideration. In any proceedings to determine the
92amount of any fee due hereunder, it shall be presumed that any transfer for consideration of less
93than fair market value of the real property interest transferred was made as a gift without
94consideration to the extent of the difference between the fair market value of the real property
95interest transferred and the amount of consideration claimed by the seller to have been paid or
96transferred, if the purchaser shall have been at the time of transfer the spouse, the lineal
97descendant, or the lineal ancestor of the seller, by blood or adoption, and otherwise it shall be 6 of 13
98presumed that consideration was paid in an amount equal to the fair market value of the real
99property interest transferred, at the time of transfer.
100 (d) Transfer to the trustees of a trust in exchange for a beneficial interest received by the
101purchaser in such trust; distributions by the trustees of a trust to the beneficiaries of such trust.
102 (e) Transfers by operation of law without actual consideration, including but not limited
103to transfers occurring by virtue of the death or bankruptcy of the owner of a real property
104interest.
105 (f) Transfers made in partition of land and improvements thereto, under chapter two
106hundred and forty-one of the General Laws.
107 (g) Transfers to any charitable organization as defined in clause Third of section five of
108chapter fifty-nine of the General Laws, or any religious organization, provided that the real
109property interest so transferred will be held by the charitable or religious organization solely for
110its public charitable or religious purposes.
111 (h) Transfers to a mortgagee in foreclosure of the mortgage held by such mortgagee, and
112transfers of the property subject to a mortgage to the mortgagee in consideration of the
113forbearance of the mortgagee from foreclosing said mortgage.
114 (i) Transfers made to a corporation or partnership or limited liability company at the time
115of its formation, pursuant to which transfer no gain or loss is recognized under the provisions of
116section three hundred and fifty-one or seven hundred and twenty-one of the Internal Revenue
117Code of 1986, as amended; provided, however, that such transfer shall be exempt only in the
118event that (1) with respect to a corporation, the transferor retains an interest in the newly formed 7 of 13
119corporation which is equivalent to the interest the transferor held prior to the transfer, or (2) with
120respect to a partnership or limited liability company, the transferor retains after such formation
121rights in capital interests and profit interests within such partnership or limited liability company
122which are equivalent to the interest the transferor held prior to the transfer.
123 (j) Transfers made to a stockholder of a corporation in liquidation or partial liquidation of
124the corporation, and transfers made to a partner of a partnership or to a member of a limited
125liability company in dissolution or partial dissolution of the partnership or limited liability
126company; but the transfer shall be exempt only if (i) with respect to a corporation, the transferee
127receives property (including real property interests and other property received) which is the
128same fraction of the total property of the transferor corporation as the fraction of the
129corporation's stock owned by the transferee prior to the transfer or (ii) with respect to a
130partnership or limited liability company, the transferee receives property (including real property
131interests and other property received) which is the same fraction of the property of the
132partnership or limited liability company as the fraction of the capital and profit interests in the
133transferor formerly owned by the transferee.
134 (k) Transfers consisting of the division of marital assets under the provisions of section
135thirty-four of chapter two hundred and eight of the General Laws or other provisions of law.
136 (l) Transfers of property consisting in part of real property interests situated in Nantucket
137County and in part of other property interests, to the extent that the property transferred consists
138of property other than real property situated in Nantucket county; provided that the purchaser
139shall furnish the Town with such information as it shall require or request in support of the claim
140of exemption and manner of allocation of the consideration for such transfers. 8 of 13
141 (m) The first $2 million of the sale price of any transfer or series of transfers of real
142property interests in a single transaction. Said exemption may be adjusted as determined by the
143affirmative vote of two-thirds of voters at an annual or special town meeting.
144 (n) Transfers of minority interests in corporations, trusts, partnerships or limited liability
145companies which are publicly traded, which trades are not part of a series of transfers which
146together constitute a transfer of control of a corporation, trust, partnership or limited liability
147company.
148 SECTION 5. (a) The Town treasurer shall keep a full and accurate account stating when,
149from or to whom, and on what account money has been paid or received relative to the activities
150of the Trust Fund and the Housing Fund. Said account shall be subject to examination by the
151director of accounts or his agent pursuant to section forty four of chapter thirty five of the
152General Laws.
153 (b) Schedules of beneficiaries of trusts, list of stockholders of corporations and lists of
154partnerships filed with the Trust Fund for the purpose of determining or fixing the amount of the
155fee imposed under section ten or for the purpose of determining the existence of any exemption
156under section twelve shall not be public records for the purposes of section ten of chapter sixty-
157six of the General Laws.
158 SECTION 6. A seller who fails to pay all or any portion of the fee established by section
159two on or before the time when the same is due shall be liable for the following additional
160payments in addition to said fee:
161 (a) Interest: The seller shall pay interest on the unpaid amount of the fee to be calculated
162from the time of transfer at a rate equal to fourteen per cent per annum. 9 of 13
163 (b) Penalties: Any person who, without fraud or willful intent to defeat or evade a fee
164imposed by this chapter, fails to pay all or a portion of the fee within thirty days after the time of
165transfer, shall pay a penalty equal to five per cent of the outstanding fee as determined by the
166Town for each month or portion thereof thereafter that the fee is not paid in full; provided,
167however, that in no event shall the amount of any penalty imposed hereunder exceed twenty five
168per cent of the unpaid fee due at the time of transfer. Whenever the Town determines that all or a
169portion of a fee due under this chapter was unpaid due to fraud with intent to defeat or evade the
170fee imposed by this chapter, a penalty equal to the amount of said fee as determined by the Town
171shall be paid by the seller in addition to said fee.
172 SECTION 7. (a) The Town shall notify the purchaser and the seller by registered or
173certified mail of any failure to discharge in full the amount of the fee due under this Act and any
174penalty or interest assessed. The Town shall grant a hearing on the matter of the imposition of
175said fee, or of any penalty or interest assessed, if a petition requesting such hearing is received by
176the Town within thirty days after the mailing of said notice. The Town shall notify the purchaser
177and the seller in writing by registered or certified mail of its determination concerning the
178deficiency, penalty or interest within fifteen days after said hearing. Any party aggrieved by a
179determination of the Town concerning a deficiency, penalty or interest may, after payment of
180said deficiency, appeal to the district or superior court within three months after the mailing of
181notification of the determination of the Town. Upon the failure to timely petition for a hearing, or
182appeal to said courts, within the time limits hereby established, the purchaser and seller shall be
183bound by the terms of the notification, assessment or determination, as the case may be, and shall
184be barred from contesting the fee, and any interest and penalty, as determined by the Town. All
185decisions of said courts shall be appealable. Every notice to be given under this section by the 10 of 13
186Town shall be effective if mailed by certified or registered mail to the purchaser or the seller at
187the address stated in a recorded or registered instrument by virtue of which the purchaser holds
188any interest in land, the transfer of which gives rise to the fee which is the subject of such notice;
189and if no such address is stated or if such transfer is not evidenced by an instrument recorded or
190registered in the public records in Nantucket County, such notice shall be effective when so
191mailed to the purchaser or seller in care of any person appearing of record to have a fee interest
192in such land, at the address of such person as set forth in an instrument recorded or registered in
193Nantucket County.
194 (b) All fees, penalties and interest required to be paid pursuant to this chapter shall
195constitute a personal debt of the seller and may be recovered in an action of contract or in any
196other appropriate action, suit or proceeding brought by the Town; said action, suit or proceeding
197shall be subject to the provisions of chapter two hundred and sixty of the General Laws.
198 (c) If any seller liable to pay the fee established by this act neglects or refuses to pay the
199same, the amount, including any interest and penalty thereon, shall be a lien in favor of the Town
200upon all property and rights to property, whether real or personal, belonging to either such
201purchaser or such seller. Said lien shall arise at the time of transfer and shall continue until the
202liability for such amount is satisfied. Said lien shall in any event terminate not later than six years
203following the time of transfer. Said lien shall not be valid as against any mortgagee, pledgee,
204purchaser or judgment creditor unless notice thereof has been filed by the Town (i) with respect
205to real property or fixtures, in the registry of deeds for Nantucket County, or (ii) with respect to
206personal property, in the office in which a security or financing statement or notice with respect
207to the property would be filed in order to perfect a nonpossessory security interest belonging to 11 of 13
208the person named in the relevant notice, subject to the same limitations as set forth in section
209fifty of chapter sixty two C of the General Laws.
210 (d) Sellers applying for an exemption under subsections (a) through (o) of section four
211shall be required at the time of application for exemption to execute an agreement legally
212binding on sellers and separately legally binding upon any Legal Representative of the sellers (1)
213assuming complete liability for any fee, plus interest and penalties if any, waived on account of
214an allowed exemption subsequently determined to have been invalid, and (2) submitting to the
215jurisdiction of the trial court of the commonwealth sitting in Nantucket County. Fees, plus
216interest and penalties if any, shall be calculated as of the date of the initial property transfer.
217Execution of the above-described agreement shall not be required of any mortgagee, pledge,
218purchaser or judgment creditor unless notice of the agreement has been recorded or filed by the
219Town.
220 In any case where there has been a refusal or neglect to pay any fee, interest or penalties
221imposed by this act, whether or not levy has been made, the Town, in addition to other modes of
222relief, may direct a civil action to be filed in a district or superior court of the commonwealth to
223enforce the lien of the Town under this section with respect to such liability or to subject any
224property of whatever nature, of the delinquent, or in which he has any right, title or interest, to
225the payment of such liability.
226 The Town may issue a waiver or release of any lien imposed by this section. Such waiver
227or release shall be conclusive evidence that the lien upon the property covered by the waiver or
228release is extinguished. 12 of 13
229 SECTION 8. The fee described by Section 2 shall be of ten-year duration from the date
230this legislation take effect. This fee may continue for five-year periods by a majority vote at
231Town Meeting reauthorizing the fee. The fee described by Section 2 may be 1) decreased, or 2)
232eliminated by a two-thirds vote of Town Meeting. The threshold exemption described in Section
2334 (m) may similarly be raised by an affirmative two-thirds vote of Town Meeting. In the event
234that Town Meeting does not renew the fee at the ten-year anniversary, or any subsequent five
235year anniversary, or Town Meeting votes to eliminate the fee, the balance of any fees previously
236collected shall be transferred to the Town of Nantucket and held by the Treasurer in a separate
237account, and shall first be used to satisfy any outstanding liabilities or obligations incurred by the
238Town of Nantucket or the Affordable Housing Trust as a result of imposition of the fee, and the
239remainder may be expended without further appropriation by the Board of Selectmen for
240affordable housing purposes. In the event that the liabilities and obligations of the Town of
241Nantucket or the Affordable Housing Trust exceed the amounts transferred to the Town, the fee
242shall remain in full force and effect until such liabilities and obligations have been satisfied.
243 SECTION 9. The provisions of this act are severable, and if any provision hereof,
244including without limitation any exemption from the fee imposed hereby, shall be held invalid in
245any circumstances such invalidity shall not affect any other provisions or circumstances. This act
246shall be construed in all respects so as to meet all constitutional requirements. In carrying out the
247purposes and provisions of this act, all steps shall be taken which are necessary to meet
248constitutional requirements whether or not such steps are required by statute.
249 SECTION 10. If the Town has determined that a fee is due by asserting the application of
250the evasion of fee doctrine described in Section 2, then the seller shall have the burden of
251demonstrating by clear and convincing evidence as determined by the Town that the transfer, or 13 of 13
252series of transfers, possessed both: (i) a valid, good faith business purpose other than avoidance
253of the fee set forth in Section 2 and (ii) economic substance apart from the asserted fee avoidance
254benefit. In all such cases, the transferee shall also have the burden of demonstrating by clear and
255convincing evidence as determined by the Town that the asserted non-fee-avoidance business
256purpose is commensurate with the amount of the fee pursuant to Section 2 to be thereby avoided.
257 SECTION 11. This act shall take effect ninety (90) days following the date of passage.