New Tax Withholding Law for Massachusetts Sales

Proposed Tax Withholding Law for Sales of $1 million and up

Effective June 1, 2025, transfers of Massachusetts real estate with a sale price of $1 million or more may be subject to capital gains tax reporting by the seller.

As the proposed regulation, 830 CMR 62B.2.4 currently reads:

1.      Million-dollar sales by non-residents will be subject to a state tax withholding of 5% or more, collected by the settlement agent at closing and remitted to the MA Department of Revenue.

2.      Sales by Massachusetts residents will not be subject to withholding, BUT sellers will still be required to complete a Transferor’s Certification which:

a) documents the seller’s net capital gain from the sale; and

b) certifies whether they qualify for an exemption from or reduction in the withholding requirement.

What Real Estate Agents Should Do Before June 1:

1.      Get familiar with the proposed regulation: 830 CMR 62B.2.4 (Draft)

2.      Encourage impacted sellers to consult tax and/or legal advisors well in advance of closing.

3.      Coordinate closely with closing attorneys to ensure proper certifications and filings are in place.

4.      Review your deal timelines for any June closings that may fall under the new rule.

5.      Attend an upcoming webinar presented by Vanderveen Law in collaboration with a local tax expert, focusing on the current status of the proposed regulation and strategies to safeguard both your client and yourself when the new rule is implemented.

Further information regarding the webinar will be shared on the Vanderveen Law website, in addition to our official Facebook and Instagram pages as soon as the final details are in place.