Baker Wants To Hike Excise Tax To Fight Climate Change. Others Say It Should Help Housing Crisis

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Baker is set to sign the largest overhaul of school funding in 26 years. (Jose Luis Magana/AP)
Baker is set to sign the largest overhaul of school funding in 26 years. (Jose Luis Magana/AP)

Gov. Charlie Baker wants to increase the tax paid when selling property by 50% and use the money to combat climate change, but some advocates say it should be used to build affordable housing.

The deed excise tax already exists in Massachusetts. Sellers are responsible for paying $4 on every $1,000 grossed. So, for a $500,000 home sale, that amounts to a $2,000 tax. Baker’s plan would increase that to $3,000.

It's estimated that more than $100 million would be raised from the tax. Under Baker's plan, the money would finance investments in climate adaptation — not only on public property, but the state would also have the flexibility to invest in private property.

Advocates like Joe Kriesberg of the Massachusetts Association of Community Development Corporations like the plan, but want it to go further.

“I don’t know so much that we differ in that we both agree we need to invest in climate resilience, obviously we have a huge crisis looming and we need to take action now to protect our homes and protect our neighborhoods," Kriesberg said.

But Kriesberg and others want the money to help create affordable housing as well as go toward climate initiatives. So they want to double the excise tax, not just increase it by 50%. Their argument? Effects of climate change and housing needs go hand in hand.

"We have seen it time and time again, Kriesberg said. "Tenants don't have homeowners' insurance. They don't get the same kind of government subsidy and support after the disaster. They're often displaced far and wide. We need to make sure that the housing they live in is as strong and secure as possible. And we need to know that they can stay in their community as things change. ”

After the hearing, Baker told reporters he wasn’t familiar with the call to use excise tax dollars to fund housing. But Baker says he’s happy with the bill in its current form.

"More and more of the conversations I've had with people who'd been damaged and affected by storms all came down issues around property, and that made it seem to me like an element that was attached to property — since this is mostly about property protection — would be the best way to fund it," Baker said.

The real estate lobby in Massachusetts argues against a further tax. In a statement, a spokesman for the Massachusetts Association of Realtors said the tax would exacerbate the state's housing crisis by creating an entrance or exit fee to homeownership.

Correction: Due to an editing error, an earlier version of this story's headline referenced property taxes, not real estate excise taxes. We regret the error.

This article was originally published on June 19, 2019.

This segment aired on June 19, 2019.


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Simón Rios Reporter
Simón Rios is an award-winning bilingual reporter in WBUR's newsroom.



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