Hmm. Hmm. I don’t know about this one, I’ve been kind of a) ambivalent, and, b) disinterested in the topic.
Senate Bill S. 2555, AN ACT ESTABLISHING THE MARTHAâ€™S VINEYARD AND NANTUCKET HOUSING BANKS, recently passed in the State Senate. This bill has now moved to the House of Representatives and is currently before the House Committee on Ways and Means. The entire House could vote on this bill as early as Tuesday next week.
What does the Act do?
Well, it basically creates a new 1 percent tax, to be paid by a seller, at closing, on the sale of real estate on Martha’s Vineyard and Nantucket.
The measure exempts the first $750,000 of each sale on Martha’s Vineyard, and the first $2 million of each sale on Nantucket.
The funds would go into housing banks that would distribute the money to provide affordable housing for year-round residents who earn up to 150 percent of the area’s median income.
The projects would include building new homes, purchasing land, creating employee housing, down-payment assistance programs and rent subsidies.
(In order for the tax to become effective, it would have to be approved at Nantucket and Martha’s Vineyard town meetings.)
So, the tax would only apply to the sales of expensive homes, and, even in the stratified world of the islands, that would only include a handful of homes, each year, probably.
Why do I dislike it? Well, I don’t think it will do anything to solve, or even address the problem of expensive housing on the two islands. I feel as though high prices are directly the result of restrictive housing and land regulations, which basically outlaw the building of anything, anywhere.
I also dislike that the tax is applied unequally. We have a flat sales tax of 5% in Massachusetts, and a flat income tax of 5%, I mean, 5.25% (whatever it is, now), and I like that.
Of course, the Massachusetts Association of Realtors is against the new law.
I’m more against it for fairness reasons. Obviously, anyone selling a property worth more than $750,000 doesn’t care if he or she is charged an extra $7,500 or $10,000, at closing.
But, I don’t like it because it sets a bad precedent, and because it won’t solve any problem, at least in my opinion. (Plus, it kind of does an end-run around Prop 2 1/2, doesn’t it, by allowing the two towns to raise more revenue than they could from local property taxes. And, um, that would be illegal.)