BOSTON (SHNS) – A proposed tax in Boston hit the House floor Monday in a late-session advancement for the controversial idea of imposing a new charge — up to 2 percent — on real estate transactions over $2 million in the state’s most populous city.

The House gave the bill (H 4637) a vote of initial approval after a positive report from the House Steering, Policy and Scheduling Committee chaired by Boston Rep. Kevin Honan.

The bill aims to direct new revenue to affordable housing, while opponents have said there are other funding sources available and the cost of an extra charge on transfers would be passed on to tenants.

The Boston City Council and Mayor Michelle Wu approved the legislation back in March before it was filed in the Legislature by Rep. Brandy Fluker Oakley. The Revenue Committee, chaired by Rep. Mark Cusack of Braintree and Sen. Adam Hinds of Pittsfield, extended their consideration of the measure all the way to July 31 before awarding it a favorable report.

Opposition from any one lawmaker grows in importance after July 31. Both branches are set to meet for the rest of the term in informal sessions, where a lone lawmaker can object to a bill’s consideration on the floor.

The Revenue Committee’s reports on several local transfer tax proposals have featured dissenting votes from Sen. Ryan Fattman of Sutton, according to the House calendar, and a Boston senator was cool to the transfer tax idea at a hearing in June.

Sen. Nick Collins of South Boston characterized the proposal as a “tax increase” in his testimony to the Revenue Committee in June, while adding that he supported the “spirit of the bill” and the “intentions of the funds,” which the city would direct toward affordable housing.

During a year when calls for tax relief have echoed around the state, Collins cautioned against “taking a step in the wrong direction of tax increases, instead of prioritizing our spending or seeing what we have room to do with in terms of revenue generation that’s already the authority of municipalities.”

Asked Monday about his feelings on the bill’s advancement, Collins told the News Service that “really my priority is to focus legislative efforts, at the state level, to help the City of Boston fix the crisis at Melnea Cass and Mass. Ave. Everything else is secondary at this point.”

The bill now moves to the House Committee On Bills In The Third Reading. If chairwoman Rep. Denise Garlick of Needham moves the bill out of that panel, another favorable House vote would send it to the Senate.

At the Revenue Committee hearing, Wu cited housing costs as the “number one challenge and stress that our residents raise with me” and said the proposed tax would “make a huge impact.”

“Based on numbers from 2021, this would generate up to $100 million in local revenue to tackle our housing crisis, and would have only affected about 700 property sales in the entire city out of nearly 10,000 transactions, so about 7 percent affected,” Wu said. ” … This is not about increasing upfront costs, this is not about adding to the burden as developers are looking to cobble together the permitting costs and getting through the process. This is adding a very small transaction fee at the point of sale, when the resources are there, to be able to make a huge impact across our city.”

The transfer tax would play into a “very small list” of funding sources to support affordable housing, Marc Draisen of the Metropolitan Area Planning Council told lawmakers.

“A number of our cities and towns, and also cities and towns in other parts of the commonwealth, are seeking to do their part to address the housing crisis, and they need more funds to do so,” Draisen told the Revenue Committee. ” … The only way we’re going to be able to address that is by increasing the overall supply of housing and by ensuring that a reasonable percentage of those units are affordable to low- and moderate-income households. We can’t do one or the other. We need to do both. And both of them, but particularly ensuring affordability, requires funds.”

Other transfer tax bills are pending at early stages of the legislative process, like Somerville’s (H 3938) and Brookline’s (H 4567) which were both favorably reported by the Revenue Committee and are currently in a holding pattern on the House calendar. The Senate gave initial approval in March to a Concord transfer tax bill (S 2437), which has sat since then in the Senate Third Reading Committee.

Greater Boston Real Estate Board government affairs director Patricia Baumer told the News Service Monday that Boston’s bill is “pretty broad,” different from other local transfer tax proposals, and “kind of an unprecedented attempt by the City of Boston to impose taxes.”

“In addition to being a sales tax on real estate, if you take a look at it pretty closely, it also captures the transfer of controlling interest in a property,” Baumer said. “So it really gives the Boston City Council — it gives them an unprecedented amount of authority to define, by ordinance at a local level, what constitutes a taxable controlling interest, and how the transfer of the taxable controlling interest is going to be calculated,” Baumer said.

She said her association is concerned the tax could be applied to “nominal” transactions and to “the transfer of controlling interest in a trust, an LLC, or any other entity that holds a direct or indirect interest in property located in the City of Boston.”

Baumer and Dawn Ruffini of the Mass. Association of Realtors both pointed Monday to the Community Preservation Act (CPA) as a funding source for affordable housing projects, and Baumer said the Legislature considered a real estate transfer tax in the 1990s but “realized that the CPA is a much more stable source of revenue.”

Proponents of the transfer charge have faced an uphill climb for several years on Beacon Hill, where the House overwhelmingly rejected a bid two years ago to create a general local option for cities and towns to impose transfer taxes.

“A real estate transfer tax is not going to solve our affordable housing crisis. Moreover, it can drive up the cost of housing by tacking on an additional fee that low-, moderate-, and middle-income homebuyers cannot afford,” Rep. Ken Gordon of Bedford said on the House floor in 2020, before the chamber voted 29-130 against a Rep. Mike Connolly amendment to create a local option.

Baumer juxtaposed the House’s advancement of the tax bill with recent hefty state revenue hauls that triggered the state’s tax cap and are resulting in credits that will flow back to taxpayers.

“Their surplus revenue, the 62F, is kicking in. Money’s not the issue, right? This is about communities wanting additional taxing authority,” she said.