New Sales Tax Exemption On Building Materials For Affordable Housing Could Be A Boon For Nantucket

A new Massachusetts law creates a $35 million annual sales tax exemption on building materials for approved affordable and attainable multi-family housing projects to spur their development.

“This new tax exemption could significantly improve the financial feasibility of housing projects on Nantucket,” Nantucket Housing Director Kristie Ferrentella told the Current. “With construction costs on the island continuing to rise, any reduction in development costs can have a meaningful impact on project viability.”

Authored and advanced by Julian Cyr, Nantucket’s representative in the state Senate, alongside Senate president Karen Spilka, the tax credit was proposed in response to increasing construction costs driven by federal tariffs and supply-chain disruptions.

“I hear every day that the failure to build housing in Massachusetts is having detrimental impacts to our residents and employers,” Cyr said in a statement. “There’s no one fix, but the Senate is determined to make it faster and cheaper to build the homes Massachusetts needs. This measure is a significant step toward accelerating production and easing the pressure on working families.”

Massachusetts is gripped by one of the country’s worst housing crises, and Nantucket is arguably the most extreme example in the state.

“We are hopeful this measure will help advance new housing projects and create additional year-round housing opportunities for local workers, municipal employees, and other members of our community,” Ferrentella said.

For Nantucket, the sales tax exemption is notable in that it will not require any additional investment from island taxpayers, who have poured millions into local affordable housing initiatives.

According to a press release, a broader supplemental budget signed Friday that includes the tax credit also features investments in early literacy and special education, public health, transportation infrastructure and regional transit.