There are bills pending in both the House and the Senate that would increase the size of the surcharge imposed on documents recorded at the registry of deeds to fund the state's contribution to the Community Preservation Act (CPA).
Enacted in 2000, the CPA allowed residents of cities and towns to vote to increase their property taxes by a small percentage with the money thus raised dedicated to open space preservation, recreation uses, historic preservation or affordable housing. As an incentive, the state created a matching fund that would contribute to each the amount raised by each community.
To fund its contribution, the state legislature imposed a surcharge on documents recorded at the registry of deeds. For most documents, the surcharge is $20. For municipal lien certificates it's $10. There is no surcharge on homestead declarations.
House Bill 2463 would increase the CPA surcharge to $75 per document ($35 for MLCs). That means the total recording fee for a discharge would go from $75 ($50 fee, $20 CPA surcharge, $5 technology surcharge) to $130 ($50 fee, $75 CPA surcharge, $5 tech surcharge). This bill would be effective 120 days after enactment.
Senate Bill 1618 would increase the CPA surcharge to $50 ($25 for MLCs). The mortgage discharge would cost $105 ($50 fee, $50 CPA surcharge, $5 tech surcharge) under this bill which would be effective December 31, 2019.
These bills also apply different treatment to documents mailed to the registry. Under the House bill, the surcharge increase would go apply on the day the document was received by the registry regardless of when it was mailed. Under the Senate bill, the surcharge increase would apply based on the date of the postmark bearing the document regardless of when the registry received it. In other words, if your document was postmarked the day before the increase went into effect but the registry received it three days after the increase went into effect, the registry would charge the old fee for the document.
It seems likely that the CPA surcharge will be increased this year. How much the increase will be and how and when it will be implemented should be decided in the coming weeks.
Showing posts with label CPA. Show all posts
Showing posts with label CPA. Show all posts
Thursday, May 23, 2019
Monday, December 17, 2018
More revenue needed for CPA
The editorial in the December 1, 2018 Boston Globe, "CPA has grown; state funding should grow with it" advocated an increase in the state fund used to provide money to municipalities under the Community Preservation Act.
The CPA was enacted back in 2000. It provided a mechanism for cities and towns to assist in preserving open space, historic preservation, affordable housing, and recreation. Residents in towns enacting the CPA had to agree by referendum vote to impose a surcharge on their own property taxes. The amount raised through that mechanism was then matched by money from the state. The pool of money the state used to make these payments was funded by a $20 per document surcharge on documents recorded at the registry of deeds.
Between the booming real estate market of the early 2000s (this registry recorded 144,000 documents in 2003 and averages about 60,000 over the past few years) and the scarcity of communities enacting the CPA at the beginning, meant that the state match was dollar for dollar. That has changed and the matching amount now may be as low as 20% of what is raised from town residents.
There have been several efforts made to increase the flow of money into the state matching fund. Most recently, legislation backed by Governor Baker would have raised the registry of deeds surcharge from $20 to $50 per document. Despite the Governor's support, this bill did not survive the last legislative session.
The Globe editorial urges lawmakers to increase CPA funding but suggests a surcharge on recorded documents might not be the way to do that since the flow of money is tied to the health of the real estate market. When times are good, the money flows into the fund; when times are tough, the money dries up. After seeing how our volume of recorded documents rises and falls pretty dramatically, I agree with this approach.
The CPA was enacted back in 2000. It provided a mechanism for cities and towns to assist in preserving open space, historic preservation, affordable housing, and recreation. Residents in towns enacting the CPA had to agree by referendum vote to impose a surcharge on their own property taxes. The amount raised through that mechanism was then matched by money from the state. The pool of money the state used to make these payments was funded by a $20 per document surcharge on documents recorded at the registry of deeds.
Between the booming real estate market of the early 2000s (this registry recorded 144,000 documents in 2003 and averages about 60,000 over the past few years) and the scarcity of communities enacting the CPA at the beginning, meant that the state match was dollar for dollar. That has changed and the matching amount now may be as low as 20% of what is raised from town residents.
There have been several efforts made to increase the flow of money into the state matching fund. Most recently, legislation backed by Governor Baker would have raised the registry of deeds surcharge from $20 to $50 per document. Despite the Governor's support, this bill did not survive the last legislative session.
The Globe editorial urges lawmakers to increase CPA funding but suggests a surcharge on recorded documents might not be the way to do that since the flow of money is tied to the health of the real estate market. When times are good, the money flows into the fund; when times are tough, the money dries up. After seeing how our volume of recorded documents rises and falls pretty dramatically, I agree with this approach.
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