Expensive home sales could trigger millionaire tax, but figures show Worcester and Springfield rarely suffer

Nearly all net gains from home sales in Worcester and Springfield are well below the threshold needed to trigger the so-called millionaire tax, according to a new analysis of the contentious referendum facing voters in November.

If it succeeds in the polls, Ballot Question 1 (also known as the Fair Share Amendment) would impose a 4% surtax on income over $1 million. At the discretion of the Massachusetts legislature, the newly injected tax will be earmarked for transportation and public education expenses.

Opponents of the ballot measure argue that one-time income, including capital gains from home sales, would unfairly trigger a millionaire tax for residents who are not normally affected by the surcharge. But a report released Thursday by the Massachusetts Center for Budget and Policy contradicts that claim.

  • read more: More Mass. Liquor Licence?How Poll Question 3 Impacts Your Community

La-Brina Almeida, a policy analyst and development coordinator, wrote in the report that for the millionaire tax to take effect, the net gain on home sales would likely need to reach at least $1.5 million. That’s because married couples who sell their primary residence can claim a $500,000 tax deduction for their taxable capital gains, meaning sales of less than $1.5 million won’t trigger the millionaire tax.

Of the 1,578 total sales last year, only one home in the city of Worcester earned more than $1 million, while another earned more than $1.5 million, the report said.

In Springfield, none of the 1,360 total sales exceeded the $1 million or $1.5 million threshold.

  • read more: Report shows how putting towns first, building trust is key to Baker-Polito strategy

In Boston, of the 5,177 total sales, 212 homes earned more than $1 million, and another 107 homes earned more than $1.5 million.

Fewer than 1 percent of homes sold in 2021 will fetch $1.5 million or more, according to the Warren Group’s real estate data.

Cities with the biggest gains include Greater Boston, Cape Cod and the Islands. In Edgartown and Nantucket, for example, nearly one-third of sales were reaped in excess of $1.5 million.

  • read more: New Maura Healey ad highlights AG’s role in opioid epidemic

Source link