Buying Before You Sell in Massachusetts: The Whole Picture

Key takeaways

mass.gov: “Tax year 2026: For income exceeding $1,107,750, there is an additional surtax of 4%.” A long-held home's gain can reach it.
The threshold moves annually: $1,053,750 (2024), $1,083,150 (2025), $1,107,750 (2026), and applies per tax year.
Massachusetts runs three conforming limits: $1,249,125 on the islands, $962,550 in the Boston metro, $832,750 in the other seven counties.
Cape Cod is at the baseline; the islands carry the maximum. $416,375 apart across Nantucket Sound.
Vineyard Haven's typical value of $1,557,691 is $308,566 above its own limit, so the median purchase there is already a jumbo.
Typical values, August 2026: Barnstable Town $762,442, Boston $733,574, Worcester $479,429, Springfield $376,569. All rising.
Fannie B3-3.8-05 (09/02/2026) bans leases for departing residences, counts rent at 75% less PITIA as an offset only, and adds six months of reserves under 12 months of management experience.

Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.

By Mike Certo, Cornerstone First Mortgage · NMLS #260555 · Updated September 25, 2026

Everything a Massachusetts homeowner needs before making an offer, starting with a tax threshold and a county line neither of which appears on a rate sheet.

Apply Now Talk to Mike first

One: ask your CPA about the gain before anything else

Massachusetts applies an additional 4% surtax to income exceeding $1,107,750 for tax year 2026. A capital gain above the federal exclusion flows into that year's taxable income, and on a home held for decades in this market the gain can be large enough to carry a household over the line on its own.

This is first on the list because it is the only item that can change which structure you choose rather than merely how you size it, and because it is the one your lender cannot answer. See the surtax page.

Two: find out which of the three limits applies

Massachusetts has three conforming tiers for 2026. Dukes and Nantucket counties at $1,249,125. Essex, Middlesex, Norfolk, Plymouth and Suffolk at $962,550. Barnstable, Berkshire, Bristol, Franklin, Hampden, Hampshire and Worcester at the $832,750 national baseline.

Cape Cod is in that last group. The islands, a few miles away, are in the first. See the three tiers page.

Three: pick the structure

Carry both and recast, borrow against the departing home's equity, or keep it and rent it. Two of the three depend on net proceeds; the third does not realise a gain this year. The structures page compares them.

The rental-income rules changed in September 2026

Fannie Mae Selling Guide B3-3.8-05, dated 09/02/2026 under Announcement SEL-2026-08:

A primary residence being vacated and converted to an investment property when the borrower buys a new primary residence is eligible.
The lender must document a current housing payment to use any departing-residence rental income.
Documentation is a complete appraisal with market rents, a Form 1007 rent schedule, or market analysis tools with at least three comparable rentals from the same market area where possible.
Lease agreements are not permitted for any departing residence.
Adjusted net rental income is gross rent times 75% less that property's PITIA. Positive offsets that PITIA only; negative is added to the debt-to-income ratio.
Six months of reserves for the vacated property's PITIA under 12 months of property management experience.

Mechanics on the Form 1007 page, Massachusetts specifics on the rental conversion page.

Where in Massachusetts you are moving

Typical values in August 2026: Vineyard Haven $1,557,691 up 5.1%, Barnstable Town $762,442 up 2.4%, Boston $733,574 up 2.1%, Worcester $479,429 up 2.1%, Pittsfield $391,827 up 1.8%, Springfield $376,569 up 3.4%. Every one rose.

Read the move-up market page, then the Boston metro, Cape Cod, the islands or Worcester and Springfield.

Two situations with different answers

Under contract but not closed and listed but not sold have their own pages.

Frequently asked questions

What should a Massachusetts homeowner check first before buying the next house?

Whether the gain on the current home could reach the 4% surtax threshold, which mass.gov puts at income exceeding $1,107,750 for tax year 2026. It is the only item that can change which structure you choose rather than just how you size it, and it is a CPA question.

What are the 2026 conforming loan limits in Massachusetts?

Three tiers: $1,249,125 in Dukes and Nantucket, $962,550 in Essex, Middlesex, Norfolk, Plymouth and Suffolk, and $832,750 in Barnstable, Berkshire, Bristol, Franklin, Hampden, Hampshire and Worcester.

Are Massachusetts home values rising?

Every metro we track rose year over year as of August 2026: Vineyard Haven 5.1%, Springfield 3.4%, Barnstable Town 2.4%, Boston 2.1%, Worcester 2.1% and Pittsfield 1.8%.

Did the rules for using rental income from a departing residence change?

Yes. Fannie Mae Selling Guide B3-3.8-05 is dated 09/02/2026 under Announcement SEL-2026-08. Lease agreements are no longer permitted for any departing residence, qualifying income is gross rent times 75% less that property's PITIA as an offset only, and six months of reserves apply under 12 months of property management experience.

Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. The Massachusetts surtax threshold is set by the Commonwealth and indexed annually, and whether a home sale reaches it depends entirely on your facts; your CPA, your closing attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.