Select Board Voices Support For Real Estate Transfer Tax

ORLEANS – Select board members last week spoke in favor of a proposed home rule petition being explored at the county level seeking to adopt a regional real estate transfer fee for “luxury” properties across the Cape’s 15 towns.

The Barnstable County Assembly of Delegates’ economic affairs subcommittee has been workshopping the petition in recent months. Select Board chair Kevin Galligan said Oct.8 that he was approached prior to the meeting by Jon Fuller, the town’s representative to the assembly, who asked the board for its input on the proposal.

The assembly is proposing a transfer fee that would be applied to the sale of properties valued at or above $1 million. Orleans and other Cape communities would be able to opt-into the petition, and those that participate would be able to set their own fee rates of between .5 and 4 percent. 

In a press release Oct. 9, the assembly said that towns could commit 90 percent of the revenue generated through the transfer fee to local housing trusts, while the remaining 10 percent could “support regional housing initiatives and administrative costs, with no funds allowed for general county operations.” Towns also would be able to grant some exemptions, including those for first-time homeowners or year-round residents.

Some communities, including Chatham, are petitioning for their own transfer fees. Chatham has petitioned the state legislature four years in a row to allow a real estate surcharge of .5 percent on properties valued at $2 million or more. But the proposal is still before the legislature.

In the release, assembly members said that the proposed legislation allows Cape towns to make more headway in the creation of local housing through a collaborative effort between the 15 communities.

“The county has an obligation to try and come up with something that will bring a funding stream for housing,” said Delegate Susan Werner of Yarmouth. “Continuing to talk about it with no action is simply ludicrous. Some may not consider this the best way, but it's the only way right now we have been afforded that could make a huge difference in the region and in the communities themselves.”

Town Assessor Brad Hinote said that if adopted, the transfer fee as petitioned for by the assembly would apply to approximately 70 percent of single-family homes in town. While Orleans has yet to take any action on a transfer fee itself, the town is “on record” with the state in its support for local control on any transfer fee, Galligan said.

Select board members last week said that local control is a key part of the assembly’s petition if it advances.

“Each town is going to need some flexibility depending on their average housing costs where they want to set their percentage,” Michael Herman said. “But overall to be allowed to set it individually by town, I am definitely for this.”

Other board members, including Mark Mathison, sought assurances that the towns, not the county, will have control over the revenue that comes in through the transfer fees. He said there’s been some concern that the revenue would be managed at the county level and that towns might be left to “beg” for their share of the funding.

“Which is not what we can have happen, obviously,” he said.

Mathison also pointed to the pressure the legislature has received from real estate lobbies against the allowance of special petitions seeking transfer fees. But he said that pressure may be softening.

“I think some of those groups are starting to come around a little bit to understand the dilemma the towns are in and, having a little bit less of a negative influence on the legislature,” he said. “So yeah, I think we need to support this.”

Galligan, meanwhile, said the assembly’s proposed petition is lacking in detail. He also questioned the process by which the assembly is advancing the petition, saying that members could have informed their respective towns about the petition in person.

“They have the power to do it, and they’re utilizing their power,” he said. 

Andrea Reed of the select board asked that the assembly get guidance and input on the draft petition from the Cape Cod Commission.

“Because the economic impact on it with their housing information would be great,” she said.

The board did not take any formal action on the draft petition Oct. 8, but Galligan said he would instead inform Fuller of the board’s position based on the conversation between members.

The full assembly was due to discuss the draft petition further at its Oct. 15 meeting.

Email Ryan Bray at ryan@capecodchronicle.com