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If you’re considering selling a Massachusetts property – especially if you’re planning to move out of state, there’s an important new tax requirement to be aware of.
What Is the New NRW Withholding Rule?
Started with closings on or after November 1, 2025, Massachusetts requires the use of a Non‑Resident Real Estate Withholding (NRW) Form for any property with a gross sale price of $1,000,000 or more.
The purpose of this law is to ensure Massachusetts income taxes are collected when a seller is, or may become, a non‑resident.
Who Does This Apply To?
The requirement may apply if you are:
- A non‑resident of Massachusetts
- A part‑year resident
- Planning to leave the state around the time of sale
- A trust, estate, or certain entities selling property
Even sellers who remain in Massachusetts may still be required to complete the form, depending on their situation.
How Does the Withholding Work?
- The closing attorney acts as the withholding agent
- A portion of your sale proceeds is withheld at closing
- The amount is typically based on Massachusetts income tax rates
- The withheld funds are sent to the MA Department of Revenue within 10 days of closing
- This is not an extra tax – it’s a prepayment that is credited when you file your tax return
Why This Matters for Sellers
If you’re selling a home for $1 million or more, this rule can directly affect your net proceeds at closing. Planning ahead is especially important if you’re relocating or changing residency status.
Next Steps
Before selling, it is strongly recommended to:
- Speak with your CPA or tax advisor
- Review the requirement with your closing attorney
Proper planning can help avoid surprises and ensure compliance with the new law.
If you have questions about how this may impact your sale or your plans to move out of Massachusetts, feel free to reach out. I’m here to help guide you through the process.
📞 Call Alison at (617) 966‑7837
📧 Email: alison.estabrooks@cbrealty.com
Let me guide you every step of the way.
