Boston’s New 2% Real‑Estate Tax: A Push for Affordable Homes
The city’s mayor has moved a bill that would add a 2 percent fee on home sales above $2 million. The fee is aimed at raising money for low‑income housing, but critics say it will make doing business in Boston more expensive.
“This fee is a targeted approach to fund the neighborhood housing trust, mirroring successful measures in other Massachusetts cities.” – Supporters
Key Points
Fee Scope
• Applies only to the portion of a sale that exceeds $2 million.
• Smaller deals remain untouched.- Financial Impact
- Potential revenue: $160 million if adopted earlier.
- Funded through a dedicated neighborhood housing trust.
Political Journey
- City council vote approved last month.
- Signed by the mayor today.
- Forwarded to state lawmakers for review.
- Opposition
- Real‑estate groups warn it could hurt commercial property sales post‑pandemic.
The tax has struggled to pass in the state legislature for years, raising doubts about its effectiveness.
- Other Revenue Ideas
- Congestion pricing for drivers is also under consideration.
- The new fee adds to a growing list of revenue initiatives aimed at addressing Boston’s housing crisis.
Bottom Line
The fee remains controversial and must still clear state approval before it can take effect. Its success hinges on balancing the need for affordable housing with the economic realities of high‑end real estate transactions in Boston.
