Massachusetts had introduced a new rule (830 CMR 62B.2.4), November 1, 2025, that affects certain residential real estate transactions. In simple terms, if you are not a Massachusetts resident and you sell property in the state for $1 million or more, a portion of your sale proceeds will be held back at closing. This process, called “withholding,” means the closing attorney or title company sends part of the money directly to the state as a prepayment toward any taxes you may owe. This also applies to Massachusetts residents selling a home and moving out of state. The amount withheld is generally around 4% or so of your share of the sale price or based on your estimated gain. It’s important to understand that this is not a new tax, but rather a way for Massachusetts to ensure taxes are collected upfront, particularly from out-of-state sellers. Massachusetts residents and certain entities may be exempt, though documentation is still required.
