Massachusetts municipalities continue to search for new sources of revenue to offset dwindling state allocations that have caused layoffs of teachers, police and firefighters and placed stress on service delivery. The town of Upton is considering a new twist to an oft-considered method to raise money to pay for schools, playgrounds or a new library. Town fathers are proposing implementation of a 2 percent transfer tax on real estate similar to a transfer tax recently approved by Winchester officials. The twist is making it apply only on real estate transfers when buyers are moving into Upton from outside of town.

Banker & Tradesman understands the plight of our communities, which are struggling to maintain an acceptable level of services despite shrinking local aid from the state. However, we cannot endorse the idea of a transfer tax, even one as cleverly conceived as Upton’s is. If the tax is not regressive, then it certainly penalizes a specific segment of the population by placing a larger share of the town’s overall tax burden on their shoulders. In this instance, more than just buyers from outside the town would be affected. Sellers of homes in Upton would find their pool of potential buyers curtailed.

A transfer tax with a twist is a breeding ground for adding confusion to a process of home selling and buying that already is difficult to master. All parties will be required to consider the impact of the tax when the buyer is from outside the community and current residents would be left to cope with the great potential for lessened property values as buyers and sellers adjust sales prices to account for the tax.

Town officials are awaiting a ruling on the legality of applying the proposed levy only to people moving into town. Regardless of the ruling, we believe the tax is unfair and an inappropriate way to raise revenue. It should not move forward.