State Increases Mansion and Transfer Taxes in New Budget Deal
The New York State legislature and Governor Cuomo agreed to a state budget deal that created new progressive mansion and transfer taxes for residential real estate purchases and sales. The changes went into effect on July 1, 2019.
The so-called “mansion tax” – perhaps the most reviled of levies since it is paid by the purchaser and triggered by purchases of $1M or more, which barely gets you a 700sf 1br condo in Manhattan – used to be 1% of the gross sale price for all purchases of $1M or more. The new “mansion tax” still starts at 1% of the gross sale price for purchases of $1M or more, but increases progressively as follows, maxing out at 3.9% for purchases of $25M or more:
- $1,000,000 – $1,999,999: 1%
- $2,000,000 – $2,999,999: 1.25%
- $3,000,000 – $4,999,999: 1.5%
- $5,000,000 – $9,999,999: 2.25%
- $10,000,000 – $14,999,999: 3.25%
- $15,000,000 – $19,999,999: 3.5%
- $20,000,000 – $24,999,999: 3.75%
- $25,000,000 and up: 3.9%
The state transfer tax used to be .4% of the sale price for all sales. The new state transfer tax will remain .4% for all sales under $3M, but will increase to .425% for all residential sales above $3M and commercial sales above $2M. The NYC transfer taxes will remain unchanged.
The new taxes are expected to raise approximately $275M annually from Manhattan sales alone.
If you would like to learn more about the tax law changes and their implication on the real estate market in New York City, please reach out. email@example.com; (917) 675-0037