Item Coversheet


Town of Arlington, Massachusetts


ARTICLE 25
Warrant Article Title:
HOME RULE LEGISLATION/REAL ESTATE TRANSFER
Warrant Article Text:
To see if the Town will vote to authorize and request the Select Board to file Home Rule Legislation or other Special Legislation which would permit the Town to impose a real estate transfer fee or tax for the purposes of acquiring, creating, preserving, rehabilitating, restoring and supporting affordable housing in the Town; said fee or tax to be levied on the buyer, seller, or both on the purchase price of qualifying real estate, the proceeds of which are to be deposited in an Arlington Affordable Housing Trust Fund established pursuant to Section 55C of Chapter 44 of the General Laws; to set forth the rate, the qualifications for applicable transfers, and exemptions of and to such a tax or fee; and to authorize the procedures and requirements necessary for the collection of such fee; or take any action related thereto.
Requested by:
(Inserted by the Select Board at the request of the Housing Plan Implementation Committee) 
Report Excerpt:

The Select Board endorses the next step in securing steady, independent sources of revenue to assist the newly created Arlington Affordable Housing Trust Fund (“AHTF”) in supporting affordable housing throughout Arlington – filing special legislation to authorize a local real estate transfer fee. At the outset, it should be stressed that the proposal before Town Meeting, as recommended by the Housing Plan Implementation Committee is contingent upon 1) the Meeting’s approval; 2) a successful special act in the Legislature; and 3) a positive local ballot question vote to establish a fee. 

 

If all of those approvals are gained, the Town would assess a fee of between .05 and 2.00 % of the total purchase and sale price of real estate in Arlington to benefit the specific and limited purpose of supporting AHTF projects. This Board would be charged with recommending to Town Meeting for vote or bylaw the minimum sale price for triggering application the transfer fee (for all eligible transactions, not on a case-by-case basis), apportioning responsibility for the fees, and setting the rate itself for all transactions, but many common transfers would be exempt. For example a transfer or property between immediate family where little or no financial consideration is involved would be exempt. Moreover, any transfer valued at under 100% of the statewide median sale price ($445,000 in 2020) would also be exempt.

 

The benefits to affordable housing programs in Arlington, even at the lowest rates or applied to only higher value transactions would be substantial, as evidenced by this table provided by the Department of Planning and Community Development:

Finally, the Select Board remains committed to sound management of all funds, including those placed in the AHTF through a transfer fee. The Board emphasizes the importance of the reporting requirements set forth in the transfer fee special legislation and expects the AHTF’s “Trust Action Plan” and related Town departments to identify how funds are expected to be prioritized and expended. 

Vote Language:

That the Town herby authorizes and requests the Select Board to petition the General Court for special legislation substantially in the form below that that would impose a real estate transfer fee to be used by the Town for the purposes of acquiring, creating, preserving, rehabilitating, restoring and supporting affordable housing in the Town: 

 

“An act establishing a real estate transfer fee upon the transfer of property in the Town of Arlington.” 

 

SECTION 1. There is hereby imposed a real estate transfer fee, hereafter “the fee,” upon the transfer of any real property interest or the transfer of a controlling interest in a trust, limited liability company, or other entity that directly or indirectly holds an interest in any real property situated in the Town of Arlington according to the price thresholds, fee rates, and other terms to be established by Town Meeting following a recommendation by the Arlington Select Board;

 

SECTION 2. The fee shall apply to any transfer exceeding a threshold price set by Town Meeting following a recommendation by the Select Board, but not less than 100 % of the statewide median sale price of a single family home as determined by the Massachusetts Department of Housing and Community Development;

 

SECTION 3. The fee applied shall be between .05% and 2.0% of the transfer price, to be assessed upon the buyer/transferee, the seller/transferor or both parties to be determined by a vote of Town Meeting following a recommendation by the Arlington Select Board; and the Town may define by bylaw what constitutes a controlling interest and the calculation of the fee.

 

SECTION 4. The following transfers of real property interests shall be exempt from the fee established in Section 1:

 

(A) transfers for less than 100% of the state median sale price of a single family home as determined by the Department of Housing and Community Development;

(B) transfers made as gifts with consideration less than $100 if the seller shall have been at the time of the transfer the spouse, domestic partner, lineal descendant, or the lineal ancestor of the purchaser, by blood, marriage, or adoption;

(C) transfers to the federal government, the Commonwealth, and any of their instrumentalities, agencies or subdivisions, including the Town and/or the Arlington Housing Authority;

(D) transfers of residential property that include one or more units governed by affordable housing restrictions provided that the fee imposed shall be proportionately reduced based on the percentage of residential units with affordable housing restrictions, as compared to the total number of residential units; (E) transfers made without additional consideration to confirm, correct, modify or supplement a transfer previously made;

(F) transfers by operation of law without actual consideration, including but not limited to transfers occurring by virtue of death or bankruptcy of the owner of real property interest;

(G) transfers made in partition of land and improvements thereto, under chapter 241 of the General Laws;

(H) transfers to a charitable organization, as defined in clause Third of section 5 of chapter 59 of the General Laws, or a religious organization, provided, however, that the real property interests so transferred will be held solely for affordable housing related uses that are consistent with the uses allowed by the Arlington Affordable Housing Trust Fund; 

(I) transfers for a mortgagee in foreclosure of the mortgage held by the mortgagee, and

(J) transfers of the property subject to a mortgage to the mortgagee in consideration of the forbearance of the mortgagee from closing such mortgage; and transfers consisting of the division of martial assets under the provisions of Section 34 of chapter 208 of the General Laws or other provisions of law. 

 

SECTION 5. The Town may not, by bylaw or otherwise, eliminate or reduce any exemption set forth in this in Section “4” of this Act.

 

SECTION 6. The fee shall be paid to the Town into the Arlington Affordable Housing Trust Fund under the provisions of G.L. c. 44 Section 55 C, and appropriations therefrom shall be limited to financing affordable housing and reasonable amounts for personnel and other costs; and the Town shall have such remedies to collect the fee as provided by law with respect to the collection of real property taxes, including collection and imposing liens for any outstanding transfer fee.

 

SECTION 7. The Town may, by bylaw, adopt additional requirements, exemptions, waivers, and regulations to implement or enforce said fee, consistent with this act.

 

SECTION 8. The Town shall require a copy of the deed or other instrument evidencing such transfer and shall be accompanied by:

 

(A) an affidavit signed under oath or under the pains and penalties of perjury by the purchaser and seller attesting to the purchase price;

(B) the applicable fee owed or, if applicable, an affidavit of intent to seek one of the permissible exemptions, as described above for that property by the purchaser; and

(C) the basis, if any, upon which the transfer is claimed to be exempt in whole or in part from said fees. 

 

SECTION 9. Upon receipt of the transfer fee or satisfactory evidence of exemption, the Town or its designee shall promptly thereafter issue a certificate indicating that the fee has been paid or that the transfer is exempt from the fee. The South Middlesex Registry of Deeds shall not record or register a deed unless the deed is accompanied by such certificate.

 

SECTION 10. the Town shall prepare and issue an annual report that: 

 

(A) identifies fee receipts;

(B) quantifies affordable housing programs funded, including type and purpose; and

(C) evaluates the impact of said affordable housing programs, including but not limited to, to the extent reasonably possible and permitted by applicable law, the number and demographics of individuals and 36 families served as well as measures of housing stability and wealth generation in the community.

 

SECTION 11. Acceptance of this act by the Town of Arlington shall be first by vote of approval at an annual Town Meeting, to be followed by an affirmative vote of a majority of the voters at any regular or special election at which the question of acceptance is placed on the ballot.

 

SECTION 12 Sections “1” to “10,” inclusive shall take effect 30 days after such acceptance by the Town.

 

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