Amherst eyes special real estate transfer fee that would generate $1.5M

  • Amherst Town Hall

Staff Writer
Monday, September 19, 2022

AMHERST — The Town Council may seek special legislation that would allow the town to levy a fee on certain property transactions, a move that if adopted would generate close to $1.5 million to support affordable housing and municipal operations while also preserving single-family homes.

At Large Councilor Mandi Jo Hanneke and District 5 Councilor Ana Devlin Gauthier made a presentation to their colleagues on Monday about pursuing an act from the state Legislature that would allow Amherst to impose a transfer fee on all properties, though a local bylaw would likely narrow the fee application to sales of only high-end owner-occupied homes, along with all other dwellings not sold to the family or individuals who would live in them.

The councilors wrote in a memo before the meeting that the special property tax fee would promote affordable housing projects, help to maintain existing housing stock for middle-income families, and aid the town in dealing with inflationary pressures for capital needs and general operating expenses.

“To do this, we must pursue bold and creative avenues for revenue generation without causing further challenge to those seeking to buy average-priced homes in Amherst,” Hanneke and Devlin Gauthier wrote.

Cities and towns are not allowed to impose a real estate transfer fee upon the sale of a residential property without legislative approval.

“The bottom line is we can’t do this without legislative permission,” Council President Lynn Griesemer said.

Sen. Jo Comerford, D-Northampton, though, has filed a bill that would allow communities to opt in to such special tax arrangements without filing special acts. So far this year, Hanneke said nine communities have made similar requests to what Amherst is considering, including Somerville and Cambridge.

Before asking Comerford and state Rep. Mindy Domb to file the legislation, council committees will discuss the topic in the coming weeks.

Under a conceptual bylaw, which would be tailored to the town’s needs if special legislation is pursued and approved, the 2% property transfer fee would apply to the full sale price for all properties sold that are not owner occupied, and to the amount over $681,600, or 200% of the average assessed home, for owner-occupied homes. All other residential sales would be exempt.

Statistics provided to the council show that in 2021 such a plan would have brought in $1.48 million to town coffers.

This was calculated from the 12 owner-occupied homes that were sold for over 200% of the average assessed price. Those transactions, ranging from a low sale of $688,400 to a high sale of $1.43 million, would have collected $33,523.

But the bulk of the fees collected, or $1.44 million, would come from the 117 residential property transfers that were non-owner occupied. Those include a mix of condominiums, apartment buildings and single-family homes.

Based on the sample bylaw, the first $250,000 in revenue would be allocated annually to the Amherst Affordable Housing Trust. After that, any remaining funds would be split, by a percentage determined by the Town Council, between a Capital Improvement Stabilization Fund and the General Fund.

District 1 Councilor Cathy Schoen said revenue is needed and she supported this approach. “I like this idea a lot,” Schoen said. “I wish I had thought of it.”

No councilors had reservations about pursuing the idea, but both District 2 Councilor Pat DeAngelis and District 1 Councilor Michele Miller said they would like to see significantly more money targeted for affordable housing.