Boston ‘Mansion Tax’ Could Raise Millions for Affordable Housing

A tax on luxury property sales is stalled in the state legislature, causing the city to miss out on millions in potential tax revenue.

1 minute read

October 25, 2022, 6:00 AM PDT

By Diana Ionescu @aworkoffiction

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A report from the Institute for Policy Studies assesses the tax revenue lost by Boston due to the state legislature’s failure to implement a new residential real estate transfer tax. As Katie Pyzyk reports for Smart Cities Dive, the so-called “mansion tax” must be approved by the state before it can go into effect, and could have generated $19.8 million in revenue for affordable housing programs from sales at six luxury residential buildings, the report found.

“The report cites three primary ‘invisible forces’ disrupting Boston’s housing market: an explosion in short-term rentals, corporate ownership of rental housing and foreign investors.” Meanwhile, more than half of Boston renters are cost-burdened, meaning they spend more than 30 percent of their income on housing.

The luxury property transfer tax was first proposed in 2019, but struck down by the state legislature. “A luxury transfer tax on properties selling for $2 million or more took effect in New York in 2019, and an additional one is imposed on sales of $3 million or more.” Similar proposals in Los Angeles and Chicago would tax property sales above $5 million and $1 million, respectively.

Monday, October 24, 2022 in Smart Cities Dive

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