New withholding regulation impacting sellers listing properties above $1,000,000 that live out of state

 New Massachusetts Department of Revenue Non-Resident Withholding Requirement Takes Effect November 1st 

On November 1st, the Massachusetts Department of Revenue will be rolling out a new withholding regulation impacting sellers listing properties above $1,000,000 that live out of state or plan to move out of state.

Here's what you need to know as a REALTOR®:

• This is not a new tax. This is a new procedure where all sellers of properties that gross over one million will complete a transferor’s certification. This document signals to the withholding agent how much and whether they should withhold from the transaction. The state calls this an "administrative collection practice."
   
• Withholdings only apply to listings with a gross closing price above $1,000,000 listed by a seller who lives out of state or plans to move out of state. Other exemptions are listed in the regulation. 
   
• As a REALTOR®, you should:
  • Advise your seller client of the existence of the new requirement at the listing appointment.
  • Discuss with your seller client that if they are subject to withholding, they should talk to their tax and legal counsel about their circumstances and guidance for completing the transferor’s certification.