Massachusetts Implements Withholding Tax for Real-Estate Transfers $1 M+ as of Nov. 1, 2025
Effective November 1, 2025, Massachusetts introduces a new regulatory tax‐withholding requirement tied to real-estate transfers of $1 million or more. This rule adds new obligations for sellers, settlement agents and others involved in high-value transactions in the Commonwealth.
What the law is
Under regulation 830 CMR 62B.2.4, the Massachusetts Department of Revenue (DOR) mandates that for real-estate transfers (residential or commercial) with a gross sales price equal to or exceeding $1 million, certain withholding obligations apply.
What it involves
Trigger threshold: any Massachusetts real-estate transfer where the gross sales price is ≥ $1,000,000. Applies to both residential and commercial property.
Effective date: Transactions closed on or after November 1, 2025.
Withholding obligations: The settlement agent must file a withholding return with the DOR, submit a “Transferor’s Certification”, remit any required withholding payment (if applicable), and provide the fully executed settlement statement. These must be filed within 10 days of closing.
Even if no withholding payment is required (because of an exemption), the filing of a return and certification is still required.
It is the seller’s responsibility to accurately complete the portion of the Transferor’s Certification, and the settlement agent then files.
Exemptions & special conditions
The regulation includes certain exemptions—if the transferor meets particular criteria, the withholding payment may not be required, though reporting still applies.
Because this applies to both residential and commercial, any property transfer $1 M+ falls under this new rule unless specifically exempted.
Why it matters
This withholding rule is relatively rare in residential real-estate contexts and signals Massachusetts’ intent to capture tax responsibilities associated with high-value property transfers. For sellers and settlement professionals, compliance will require changes to closing workflows, certification forms, and electronic filings via the MassTaxConnect portal.
Direct implementation timeline and details
On or after Nov. 1, 2025, all real-estate closings with gross sales price ≥ $1 M trigger the new withholding return requirement.
Settlement agents must file the return electronically via MassTaxConnect.
Transferor (seller) must cooperate by completing the Certification. Settlement agent handles submission.
Key take-aways (facts only)
Threshold: $1 million or more gross sales price.
Applies to both residential and commercial transfers.
Effective date: November 1, 2025.
Withholding requirement: file return + certification; remit payment if not exempt.
Even if exempt from payment, reporting remains required.
Changes will require settlement agents and sellers to adjust closing documentation and submission practices.
Closing
For high-value property transactions across the South Shore and beyond in Massachusetts, this new withholding law marks a material change in closing procedures. Starting November 1, 2025, anyone handling a $1 M+ property transfer will need to factor in the DOR’s withholding and reporting requirement.
This post is for informational purposes only and does not constitute legal advice.
