Bill HD.1735

HOUSE DOCKET, NO. 1735 FILED ON: 1/15/2025

HOUSE . . . . . . . . . . . . . . . No.

[Pin Slip]

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 4830 OF 2023-2024.]

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Fourth General Court
(2025-2026)

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An Act Ending Large Investor Control of Homes in Massachusetts.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The General Laws is hereby amended by inserting after chapter 64N the following chapter:-

Chapter 64O. Ending Large Investor Control of Homes in Massachusetts.

Section 1. For the purposes of this chapter, the following terms shall, unless the context clearly requires otherwise, have the following meanings:

“Applicable date”, the last day of the first full taxable year: (i) after the date of the enactment of this chapter; or (ii) preceding the taxable year in which the taxpayer became a hedge fund taxpayer.

“Applicable small property”, is any small property acquired on or before the applicable date.

“Applicable taxpayer”, is any person or entity that manages funds pooled from investors and is a fiduciary with respect to such investors. The term “applicable taxpayer” shall not include an organization that is described in section 501(c)(3) and exempt from tax under section 501(a) of the Internal Revenue Code, or an organization primarily engaged in the construction or rehabilitation of single-family residences.

“Disqualified sale”, any sale or transfer to: (i) a corporation or other entity engaged in the conduct of any trade or commerce; or (ii) an individual who does not intend to occupy the single-family residence.

“Large investor”, any applicable taxpayer that has $10,000,000 or more in net value or assets under management on any day during the taxable year.

“Small property”, a residential property located in the commonwealth consisting of 1 to 4 dwelling units. The term shall not include any property that: (i) is unoccupied and was acquired through foreclosure; (ii) is used as the principal residence of any person who has an ownership interest in the applicable taxpayer; (iii) was constructed, acquired or operated with federally appropriated funding sources; (iv) is legally deemed affordable housing; or (v) a legal nonprofit.

Section 2. (a) There shall be levied on an applicable taxpayer that fails to meet the requirements of section 3 an excise tax equal to the product of: (i) $10,000,000; and (ii) the number of applicable small properties owned by an applicable taxpayer in excess of the maximum permissible small properties, as determined in section 3.

(b) The Executive Office of Housing and Livable Communities shall deposit any money collected pursuant to this chapter in the Housing Down Payment Trust Fund, established in section 5.

Section 3. (a) As of the last day of a taxable year, an applicable taxpayer shall own equal to or less than the maximum permissible small properties, as determined in subsection (b), or be subject to the excise tax established in section 2. A small property that is sold or transferred in a disqualified sale during the taxable year shall be treated as a small property that is owned by the applicable taxpayer as of the last day of such taxable year for the purposes of this chapter.

(b) The maximum permissible small properties with respect to any applicable taxpayer for any taxable year shall be determined as follows:

In the case of— the maximum permissible small properties for a large investor taxpayer is— the maximum permissible small property residences for any other applicable taxpayer is—

the first taxable year beginning after the applicable date . . . 90 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 90 percent of the number of small properties owned by the taxpayer on the applicable date

the second taxable year beginning after the applicable date . . . 80 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 80 percent of the number of applicable small properties owned by the taxpayer on the applicable date

the third taxable year beginning after the applicable date . . . 70 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 70 percent of the number of applicable small properties owned by the taxpayer on the applicable date

the fourth taxable year beginning after the applicable date . . . 60 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 60 percent of the number of applicable small properties owned by the taxpayer on the applicable date

the fifth taxable year beginning after the applicable date . . . 50 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 50 percent of the number of applicable small properties owned by the taxpayer on the applicable date

the sixth taxable year beginning after the applicable date . . . 40 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 40 percent of the number of applicable small properties owned by the taxpayer on the applicable date

the seventh taxable year beginning after the applicable date . . . 30 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 30 percent of the number of applicable small properties owned by the taxpayer on the applicable date

the eighth taxable year beginning after the applicable date . . . 20 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 20 percent of the number of applicable small properties owned by the taxpayer on the applicable date

the ninth taxable year beginning after the applicable date . . . 10 percent of the number of applicable small properties owned by the taxpayer on the applicable date 50 plus 10 percent of the number of applicable small properties owned by the taxpayer on the applicable date

any taxable year beginning more than 9 years after the applicable date . . . 0 50.

Section 4. (a) For the purposes of this chapter, an applicable taxpayer shall be considered as having acquired a small property if it acquires 10 per cent or greater ownership interest in the small property.

(b) For the purposes of this chapter, an applicable taxpayer shall be considered as owning a small property if it owns a 10 per cent or greater ownership interest in the small property.

Section 5. (a) There shall be established and set up on the books of the commonwealth a fund known as the Housing Down Payment Trust Fund, to be administered by the Executive Office of Housing and Livable Communities, in coordination with the Massachusetts Housing Finance Agency and the Department of Revenue. The fund shall be credited with: (i) funds transferred pursuant to section 2; (ii) appropriations or other money authorized or transferred by the general court and specifically designated to be credited to the fund; (iii) funds from public and private sources, including, but not limited to, gifts, grants and donations; and (iv) any interest earned on the assets of the fund.

(b) The executive office, in coordination with the Massachusetts Housing Finance Agency and the Department of Revenue, shall use the fund to provide grants for down payment assistance to first-time homebuyers purchasing small properties.

(c) Annually, the executive office shall submit to the clerks of the House of Representatives and the Senate and the joint committee on housing a report including (i) the amount and source of the deposits to the trust fund; (ii) the number of grants provided from the trust fund under subsection (b); and (iii) demographic and financial information about grant applicants and recipients.

Section 6. For each sale or transfer of an applicable small property by an applicable taxpayer, the Executive Office of Housing and Livable Communities shall require a certification signed by the purchaser or transferee that states: (i) the name and address of the purchaser or transferee; (ii) whether the sale is a disqualified sale; and (iii) whether the purchaser or transferee owns any other small properties at the time of the sale or transfer.

Section 7. Annually, the Executive Office of Housing and Livable Communities shall submit to the clerks of the House of Representatives and the Senate and the joint committee on housing a report including (i) the number of small properties owned by each applicable taxpayer in the preceding taxable year; (ii) the number of small properties acquired by each applicable taxpayer in the preceding taxable year; and (iii) the number of transfers or sales of small properties by each applicable taxpayer in the preceding taxable year, and whether the purchaser or transferee owned any other small properties at the time of the transfer or sale.

SECTION 2. Not later than 180 days following the passage of this act, the Executive Office of Housing and Livable Communities shall publish: (i) a form to be used for calculating the tax owed under chapter 64O of the General Laws, as added by section 1; and (ii) a form to be used for the certification of the sale or transfer of a single-family residence by an applicable taxpayer, as required by section 6 of said chapter 64O.

SECTION 3. The Executive Office of Housing and Livable Communities shall promulgate any rules or regulations necessary to implement this act within 90 days following the passage of this act.

Name:	District/Address:	Date Added:
James K. Hawkins	2nd Bristol	1/10/2025