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Got this email yesterday from the Greater Boston Real Estate Board:
Quote:
STOP THE SALES TAX ON BOSTON HOMES AND COMMERCIAL BUILDINGS!
CONTACT YOUR CITY COUNCILOR AND THEN CALL THEM!
On Wednesday December 11th the Boston City Council is expected to vote in support of an aggressive new sales tax on real estate sold in the City for over $2 Million.
10 of the 13 members of the Boston City Council have co-sponsored the bill including Councilors Edwards, Janey, Wu, Ciommo, Esssabi-George, Flaherty, Flynn, Garrison, O’Malley, Zakim and Campbell.
• 6% of the purchase price upon the transfer of ANY real property or the transfer of a controlling interest, in ANY real property situated in the City of Boston. 3% payable by the seller. 3% payable by the buyer. In the case of a transfer of interest, the City of Boston may define what constitutes a controlling interest in the calculation of the fee.
• 25% of the purchase price upon the repeat transfer within 24 months or transfer of a controlling interest in a trust, LLC, or other entity that directly or indirectly holds an interest in ANY real property situated in the City of Boston. Payable by the seller.
• City of Boston will adopt a law to collect and lien any outstanding fee.
• The Suffolk County Register of Deeds will not be allowed to record the deed unless a certificate showing payment of the fee has been paid.
• Exempt Properties: (i) transfers between family members; (ii) transfers of convenience as may be defined by ordinance; (iii) transfers to the government of the United States or the Commonwealth (iv) taxpayers approved by the City for an exemption for residential real property pursuant to section 5C of chapter 59 of the General law for the property to be transferred, and (v) transfers for which the sale price is under $2,000,000.
A new sales tax on real estate is terrible tax policy!
GBREB believes that we have a housing crisis and it is a community-wide responsibility that should be paid for by everyone. This tax increase comes on the heels of ANOTHER property tax surcharge to fund affordable housing, the Community Preservation Act.
The Boston Real Estate Sales tax will make Boston’s housing problems even worse! A new sales tax will discourage investment resulting in fewer housing options and lost jobs. This sales tax will not slow rising costs and in the end will be paid for by tenants and future buyers.
The Boston Real Estate Sales Tax, #0187 would subvert the voter approval process inherent in a Proposition 2½ override in which voters can decide for themselves whether to increase their own property taxes.
The Boston Real Estate Sales Tax, #0187 is inequitable and discriminatory as it would single out a small segment of the population, specifically home and commercial buyers and sellers, to pay for a community-wide need/responsibility.
Personally, I would agree that this tax is discriminatory. I'm not opposed to wealthy people paying more in taxes than lower income folks. However, I think it's unfair to ONLY tax them. If you're going to have a tax then everyone should be subject to it to some degree IMO.
My MUCH larger issue though is the section which says that the tax rate jumps to TWENTY FIVE PERCENT if the property is again within 24 months. This is going to discourage development and chances are if a homeowner is selling again this quickly it's because of a hardship. Plus many people even at the $2M level with mortgage rates so low are still only putting down around 20% which would mean they'd have to show up at the closing with cash in order to sell. At the lowest property value ($2M) this would mean $100K (5%).
Also, I take issue with the fact that the tax is based on sale price and not sale proceeds.
I know many will say "these people are rich and can handle it." Not really the point about whether they can afford it or not.
"The Boston Real Estate Sales tax will make Boston’s housing problems even worse! A new sales tax will discourage investment resulting in fewer housing options and lost jobs. This sales tax will not slow rising costs and in the end will be paid for by tenants and future buyers."
I'm getting really really tired of landlords and real estate agents acting like mafioso when it comes to housing production. "It'd be a shame should that pass-it'd be unfortunate for yous guys..expensive for the little guy". We get it your not gonna absorb any additional cost and are threatening to financially hurt tenants who have far less than you all. You can't dangle that carrot in front of our faces forever-it's offensive .
F it! well take our chances, we-the people- are tired of this bully treatment. Good on Walsh, and good on Council
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
41,937 posts, read 36,943,649 times
Reputation: 40635
Quote:
Originally Posted by MikePRU
Not really the point about whether they can afford it or not.
I don't have a position on this proposal, but this IS kind of the point.
We are chronically underfunding our public institutions at almost every level. Our economic system and the rules governing it are directly set by those that can afford access to the political systems. That is why with the expanding economic pie, those gains are almost entirely funneled directly to the elite. The elite makes the money from the society on the rules they construct. It's about time they return some of that money, probably a pittance of what they're taking out, and fund the public institutions and infrastructure that is in dire need.
That said, I see no chance of this really passing as the ruling elite will not allow it. Or if it passes, it will be at very different levels that will generate a token amount.
"The Boston Real Estate Sales tax will make Boston’s housing problems even worse! A new sales tax will discourage investment resulting in fewer housing options and lost jobs. This sales tax will not slow rising costs and in the end will be paid for by tenants and future buyers."
I'm getting really really tired of landlords and real estate agents acting like mafioso when it comes to housing production. "It'd be a shame should that pass-it'd be unfortunate for yous guys..expensive for the little guy". We get it your not gonna absorb any additional cost and are threatening to financially hurt tenants who have far less than you all. You can't dangle that carrot in front of our faces forever-it's offensive .
F it! well take our chances, we-the people- are tired of this bully treatment. Good on Walsh, and good on Council
Not everyone who is a landlord is fabulously wealthy. Everyone should be able to have a diverse portfolio of investments in an attempt to build wealth. Often that diversification means investing in real estate.
The thing about real estate and real estate investing is that it's often done on a heavily leveraged basis. So, people are investing 20% of the cost of the home out of pocket and not 100%. If anything, this tax raises the costs and hurts the little guy trying to build wealth much more than the big guy who can absorb a hit like this.
Quote:
Originally Posted by timberline742
I don't have a position on this proposal, but this IS kind of the point.
We are chronically underfunding our public institutions at almost every level. Our economic system and the rules governing it are directly set by those that can afford access to the political systems. That is why with the expanding economic pie, those gains are almost entirely funneled directly to the elite. The elite makes the money from the society on the rules they construct. It's about time they return some of that money, probably a pittance of what they're taking out, and fund the public institutions and infrastructure that is in dire need.
That said, I see no chance of this really passing as the ruling elite will not allow it. Or if it passes, it will be at very different levels that will generate a token amount.
This is clearly a philosophical difference. As I mentioned, I don't take issue with the wealthy paying more in taxes (unfortunately they often have the resources needed to take advantage of loop holes and avoid paying more). However, I do have a problem with ONLY taxing the wealthy.
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
41,937 posts, read 36,943,649 times
Reputation: 40635
Quote:
Originally Posted by MikePRU
This is clearly a philosophical difference. As I mentioned, I don't take issue with the wealthy paying more in taxes (unfortunately they often have the resources needed to take advantage of loop holes and avoid paying more). However, I do have a problem with ONLY taxing the wealthy.
Ok, I don't, since they set the system up that they get the wealth that is generated, and put those "loopholes" in place in the first place.
Not everyone who is a landlord is fabulously wealthy. Everyone should be able to have a diverse portfolio of investments in an attempt to build wealth. Often that diversification means investing in real estate.
The thing about real estate and real estate investing is that it's often done on a heavily leveraged basis. So, people are investing 20% of the cost of the home out of pocket and not 100%. If anything, this tax raises the costs and hurts the little guy trying to build wealth much more than the big guy who can absorb a hit like this.
This is clearly a philosophical difference. As I mentioned, I don't take issue with the wealthy paying more in taxes (unfortunately they often have the resources needed to take advantage of loop holes and avoid paying more). However, I do have a problem with ONLY taxing the wealthy.
Ok, I don't, since they set the system up that they get the wealth that is generated, and put those "loopholes" in place in the first place.
Everyone is entitled to their opinion.
Personally, I'd love to see the playing field leveled. Meaning not only if there is a tax that everyone carry a fair share of the burden but also that loopholes that favor the rich are eliminated.
Quote:
Originally Posted by BostonBornMassMade
Define 'everyone'
Everyone is exactly that . . . everyone. Anyone who can scrape together a couple of bucks should have the opportunity to turn that couple of bucks into a couple of more bucks.
Taxes like this really hurt "the little guy" too. You think anyone is going to redevelop a property in Boston if they have to pay a 25% tax? So, no construction going on and those guys are not going to get paid.
If developers do decide to keep doing what they do, they're not going to absorb the tax. They're going to seek to pass it along. So that means either they're going to pay less for the project or they're going to pass along the costs to the tenant or buyer (depending upon if they're developing rentals or spec property). These properties are often someone's main retirement savings and now we're talking about significantly reducing the value of them.
Personally, I'd love to see the playing field leveled. Meaning not only if there is a tax that everyone carry a fair share of the burden but also that loopholes that favor the rich are eliminated.
Everyone is exactly that . . . everyone. Anyone who can scrape together a couple of bucks should have the opportunity to turn that couple of bucks into a couple of more bucks.
Taxes like this really hurt "the little guy" too. You think anyone is going to redevelop a property in Boston if they have to pay a 25% tax? So, no construction going on and those guys are not going to get paid.
If developers do decide to keep doing what they do, they're not going to absorb the tax. They're going to seek to pass it along. So that means either they're going to pay less for the project or they're going to pass along the costs to the tenant or buyer (depending upon if they're developing rentals or spec property). These properties are often someone's main retirement savings and now we're talking about significantly reducing the value of them.
Most people don’t have $2M properties and those who do I think will be okay. They aren’t living on the edge.
Thus isn’t a sales tax on groceries it’s a sales tax on a luxury
Most people don’t have $2M properties and those who do I think will be okay. They aren’t living on the edge.
Thus isn’t a sales tax on groceries it’s a sales tax on a luxury
Bottom line is the folks who end up paying the tax are not going to be the ones that suffer because they will seek to reclaim those funds from people who are less capable of absorbing the expense. Whether it's trying to squeeze the contractor during a renovation or higher rent for the tenant someone else is really going to be footing this bill and not the intended target of the law.
So I do believe the people who will truly be impacted by this tax actually may be living on the edge.
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
41,937 posts, read 36,943,649 times
Reputation: 40635
Quote:
Originally Posted by MikePRU
Bottom line is the folks who end up paying the tax are not going to be the ones that suffer because they will seek to reclaim those funds from people who are less capable of absorbing the expense. Whether it's trying to squeeze the contractor during a renovation or higher rent for the tenant someone else is really going to be footing this bill and not the intended target of the law.
So I do believe the people who will truly be impacted by this tax actually may be living on the edge.
This is eerily in line with the mythology promoted by the right that "corporations don't actually pay taxes" and using it to justify "trickle down" economic (the fallacious supply side crud). All that junk has done is geared up the up flow of wealth to the elite.
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