Speaker Fecteau introduces bill to sustainably fund housing in Maine
LD 1082 proposes a modest increase in real estate transfer tax for home sales over $1M
AUGUSTA – Speaker Ryan D. Fecteau (D-Biddeford) today introduced a bill (LD 1082) that would ensure a sustainable source of funding to create housing in Maine through a modest increase in the real estate transfer tax.
“During the pandemic, Maine received an infusion of federal dollars that allowed us to make transformational investments in housing. Now, as those federal dollars phase out, we need to find a way to maintain our momentum so that housing production does not fall back to a rate that will fail to meet our state’s housing needs,” said Speaker Ryan Fecteau.
A 2023 report by MaineHousing and the Department of Economic and Community Development found that Maine needs to create at least 84,000 new units of housing by 2030.
LD 1082 proposes to remove the real estate transfer tax for both buyers and sellers when transactions involve first-time homebuyers who are qualified through MaineHousing. For real estate transactions on homes costing more than one million dollars, the transfer tax would be increased for only the portion of the sale above the one-million-dollar threshold.
“MEREDA believes it is essential that the state continue to support programs like the Housing First Fund, the low-income housing tax credit, the Housing Opportunities for Maine (HOME) Fund, and ongoing bond obligations. We appreciate the Speaker’s creative approach to utilizing the real estate transfer tax to address this issue,” said Bev Uhlenhake, a realtor and spokesperson for the Maine Real Estate & Development Association (MEREDA). “There are a number of us realtors who know that our current real estate transfer tax is so minor that it does not matter.”
“Right now, the housing market is broken and impacting all people in Maine…This small change to the real estate transfer tax will bring Maine in line with its neighboring states,” said Laura Mitchell, Executive Director of the Maine Affordable Housing Coalition. “While the State has made historic investments in housing over the last several years, these were one-time investments and these funds have already been distributed to projects….Housing is the solution for Maine’s economy and health, and we need to find long-term, sustainable sources of funding like this one to invest in the housing solution.”
“This is the right bill at the right time to ease Maine’s housing crisis,” said Peter McPheeters, a realtor and owner of Oceanview Properties in Biddeford, who testified in support of the bill. “This bill does not increase any costs for the vast majority of Mainers, but rather asks those who can most afford it to help those who need the most help achieve the dream of home ownership in Maine.”
“The changes proposed by this bill present an opportunity to slash the tax burden for hundreds of first-time homebuyers and those selling their homes to them by making a relatively small adjustment to larger transactions,” said Speaker Fecteau. “The new revenue will allow us to secure funding to build future homes for families and seniors. It’s imperative we do this for Maine people, for our workforce, for businesses, and for the economy as a whole.”
The Legislature’s Taxation Committee will hold a work session on the bill in the coming weeks.
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