On February 20, 2024, Legislative Director Kevin Kinnally submitted written testimony in support of HB 751- Sale of Residential Real Property- Offers to Purchase and Transfer Tax. This bill creates a process to enable local buyers to purchase properties to become owner-occupied before the sale becomes available to other actors who may seek to acquire the property for other uses. It also creates a tax disincentive for residential properties converted to a use other than owner-occupied residence.
Private equity and hedge funds are driving up housing prices. While convoluted ownership through investors’ use of limited liability companies makes it challenging to determine precisely how much of the market they control, a recent study by MetLife Investment Management found that institutional investors could control 40% of single-family rental homes by 2030. While there is no one silver bullet to address the affordable housing crisis, this bill levels the playing field and expands access to affordable housing for Marylanders who live and work in our communities.
The bill imposes two commonsense guardrails to curb this pervasive practice. First, the bill imposes a limited “preference period” for owner-occupied purchasers. Second, the bill raises the state transfer tax rate to 15% for sales of owner-occupied property to real estate enterprises. Both tools can increase housing stock and boost affordability for our shared constituents.
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