Taxation Committee advances bill to sustainably fund housing in Maine in bipartisan vote

LD 1082 proposes modest increase in real estate transfer tax for home sales over $1M

AUGUSTA – In a bipartisan vote, the Legislature’s Taxation Committee Thursday advanced LD 1082, sponsored by Speaker Ryan D. Fecteau (D-Biddeford), to the full Legislature. The bill would ensure a sustainable source of funding to create housing in Maine through a modest increase in the Real Estate Transfer Tax.

“Building new housing across our state, attainable for folks from a variety of income levels, is critical for strong economic growth and prosperity,” said Speaker Ryan D. Fecteau. “LD 1082 makes a relatively small adjustment to larger real estate transactions. As federal pandemic funds for housing phase out, the new revenue generated by this change 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.”

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 1 million dollars, the transfer tax would be increased from the current $2.20 per $500 increment (.0044%) to $6 per $500 increment (.012%) for only the portion of the sale above the one million dollar threshold.

At the public hearing in early April, realtor Peter McPheeters, owner of Oceanview Properties in Biddeford, testified in support of the bill, saying: “This is the right bill at the right time to ease Maine’s housing crisis. 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 bill will head to the House and Senate for additional votes in the coming weeks.

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