This 50-acre estate with two homes in West Tisbury sold for $15 million in January. If a real estate transfer tax existed on Martha’s Vineyard, the owner would have had to pay $130,000.
Despite fierce opposition from the real estate industry, bills that would force home sellers on Martha’s Vineyard and Nantucket to pay a 1 percent tax are moving forward.
The Senate passed the two bills earlier this week. The bills now head to the House, which has until the end of July to vote on them.
Supporters are pressing for real estate transfer taxes on high-end homes in order to create a fund to pay for affordable housing projects.
But critics argue transfer taxes are discriminatory and they fear it will set a precedent, encouraging other communities to adopt such taxes. Realtors say it’s unfair to charge only a small segment of the population for a community-wide benefit.
“We had hoped that the Senate would recognize the concerns that we have and not [have] moved the bill forward to the House,” said Steve Ryan, Massachusetts Association of Realtors’ government affairs director.
When asked whether he knew which way the House would vote on the measure, Ryan said he did not.
“We haven’t done any kind of polling and evaluation. We’ve just made sure that Â… our members shared their concerns with their legislators so that they understand why sales tax on homes is a bad idea,” Ryan.
Under the proposed legislation, Nantucket sellers would be able to exempt the first $2 million, and Martha’s Vineyard homeowners would exempt the first $750,000 of the sale price from the tax.
About two years ago, the Senate voted for similar transfer bills but the House defeated them by a vote of 90 to 64.
Supporters, which include some Realtors on the islands, say that they’re hopeful the House will pass it.
“We’ve tried to communicate with a lot of [House] members and seek their support,” said Richard Leonard, a banker who is a member of the Martha’s Vineyard Housing Bank Coalition. “Housing costs are still a major problem here. We know that the market has softened somewhat, but that runs in cycles.”
The median selling price for a single-family home on Nantucket stands at $1.65 million, slightly lower than the $1.67 million price re-corded a year ago, according to The Warren Group, Banker & Tradesman’s parent company.
In Dukes County, which mainly consists of the island of Martha’s Vineyard, the median single-family home price is $673,000, a 4.5 percent decline from $705,000 a year earlier.
“The cost of living is 60 percent higher on Martha’s Vineyard and obviously a big portion of that is housing. It’s critical for our community, as well as any other community, to retain the people who make up the community,” said Leonard, chief operating officer of Martha’s Vineyard Savings Bank.
