Wealthy Cape Cod residents are scrambling over proposals for a ‘Taylor Swift tax’-style duty on their pearly coastal mansions.
The measure is designed to help locals who say the housing market in the millionaire’s playground, where homes have an average value of $755,000, is pushing them out.
The proposal is looking to tack on a two percent surcharge on luxury homes that sell for more than $2million, which would generate up to $56million a year.
The millions earned by the Massachusetts peninsula would be used for affordable housing.
The proposal is similar to one Rhode Island will enact next summer, which slaps a surcharge on non-primary residences worth more than $1million.
It has been dubbed the ‘Taylor Swift tax’ as the singer resident owns a $17million mansion on the beach renowned for her Fourth of July parties.
Brian Dougherty, partner and CEO of Corcoran Real Estate said he has already, ‘received a number of calls from owners of significant Cape Cod properties’ seeking guidance and wondering if they should sell up fast.
‘I expect we’ll see a wave of additional properties come to market this fall that might otherwise have waited until 2026, as savvy sellers look to avoid the potential impact of a new tax,’ he told Daily Mail.
Wealthy Cape Cod (pictured) residents could face a ‘ Taylor Swift tax’ on their pearly coastal mansions as the affluent town tries to keep long-time residents. The proposal is looking to tack on a two percent surcharge on luxury homes that sell for more than $2million
The proposal is similar the one Rhode Island will enact next summer, which slaps a surcharge on non-primary residences worth more than $1million. It’s been dubbed the ‘Taylor Swift tax’ as the Nashville resident owns a $17million mansion on the beach there
He warned that if the tax is not adopted unilaterally across Cape Cod ‘disparities’ could emerge.
‘That imbalance risks creating negative ripple effects for local economies, small businesses, and the workers they employ,’ he added.
Debbie Martin, the CEO of ERA Cape Real Estate, told Daily Mail that the proposal could have a ‘devastating’ and ‘damaging’ impact on the Cape.
Martin explained that the market in the Cape has already taken a hit. She said there were only 1,300 single-family houses for sale, which is lower than what would be considered a healthy market.
Since many flocked to the Cape and other coastal towns on the East Coast during the pandemic, inventory has been scarce.
‘One more tax wouldn’t be good for the housing market,’ Martin added.
The Cape is already an expensive housing market, and another tax may prevent buyers from wanting to overcome another financial hurdle, according to Martin.
New Jersey has enacted a law similar to the proposal, and the entire state of Massachusetts looked into adding a surcharge to homes that sold for more than $1million.
Among those possibly affected include Swift’s own former Cape Cod home, which is currently on the market for $14.5
She purchased the mansion for $5million in 2012 and swiftly sold it in 2013 after her quick romance with Conor Kennedy, son of controversial Health Secretary Robert F. Kennedy Jr., fizzled out.
The Cape Cod proposal is currently in the Barnstable County Assembly of Delegates, and housing works groups in the county – which includes all of the cape – back the idea.
Rob Brennan, chief legal officer at the nonprofit organization Housing Assistance, told Realtor.com that the city was facing an ‘existential crisis’ for the working class in the wealthy enclave.
‘Without a permanent, predictable source of funding, we cannot support housing that working Cape Codders can actually afford,’ he told the outlet.
The county declared that its housing market was in an emergency in April.
‘This place we call home – the one so many of us were lucky to be born into or found and fell in love with – is slipping through our fingers,’ Barnstable County Assembly of Delegates Deputy Speaker Dan Gessen said.
‘A family today must earn more than double the average income just to afford the price of an average home. That’s not just unsustainable. That is a crisis.’
Several homes on the Cape marked between $1million and $7million don’t resemble the extravagance of Swift’s mega-mansions, even her former Cape Cod home (pictured). She purchased the home for $5million in 2012 and swiftly sold it in 2013
Swift owns a $17million mansion in Rhode Island (pictured)
Home prices have jumped up 43 percent since the pandemic, Gessen said, leaving many in the working class fighting to stay on the Cape.
‘If you didn’t inherit a house, or if you are not independently wealthy, [living here] is nearly impossible,’ the delegate said. ‘We’re losing the very fabric of our communities.’
Nearly 30 percent of Cape Cod’s workforce commutes into the town for work, according to Cape Cod Chamber of Commerce CEO Paul Niedzwiecki.
‘We are going to turn into something very different if we don’t make aggressive and transformative moves to protect the middle class,’ he said, according to Realtor.com.
Some are hoping the proposal doesn’t pass as realtors and brokers fear the wealthy will turn away from buying homes in the area and it would slow transactions.
But others argue the small fee increase won’t stop the wealthy from coming, as more millionaires continue to come to the commonwealth state.