Mayor Martin J. Walsh is pushing back against a proposal from two city councilors seeking to place a fee and “flipping” tax on high-end developments over $2 million — telling the Herald it would “negatively impact homeowners.”
“I’m concerned that this proposal will actually increase housing costs to both buyers and renters in Boston,” Walsh said in a statement. “We need to identify what the right solution is and … find a fix that won’t negatively impact homeowners.”
In January, Councilors Lydia Edwards (D-1) and Kim Janey (D-7) proposed the legislation, which would impose a 6-percent fee on most commercial and residential sales over $2 million, but excludes owner-occupants. The home rule petition would also create a “flipping” tax of up to 25 percent on repeat transfers within two years to prevent speculation in the market. The proposal is designed to funnel money toward more affordable housing during the city’s housing crisis and could generate up to an estimated $350 million a year, according to the councilors.
But Walsh says he’s not sure the issue of developers coming into the city to flip property is a big enough problem to warrant a transfer tax and worries it would in turn hurt sales in an already tight housing market. According to city records, there were 3,700 transactions in the last fiscal year that would have been susceptible to the 25-percent transfer fee were it implemented. Of those sales, 1,500 were sold at a lower price, while 1,650 were sold for the same amount of money they were purchased for, leaving only 550 potential targets of flipping.
“The argument that it’s not happening a lot is an argument that I reject,” Edwards told the Herald. “I can tell you, the reverberating effects are horrible. … Part of filing this legislation is to learn from our past mistakes. Look at Seaport. Look at that failure.”