The Real Deal New York

Mansion tax rakes in record-breaking revenue

State levy pulled in $259M; de Blasio mulls NYC version

March 20, 2014 08:05AM

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Brian Kavanagh and 2098 Frederick Douglass Blvd.

The state’s mansion tax on homes that changed hands for at least $1 million produced $259 million in the 2012-2013 fiscal year — a 22 percent jump from the last fiscal year and a record high.

The tax generated $176 million amid the recession-era 2009-2010 fiscal year, 45 percent below the level it is at now. In New York City, the tax, which was initiated in 1989, especially makes a dent on the finances of many wealthy condominium and co-op owners.

In Harlem, for example, a 1,300-square-foot two-bedroom apartment at 2098 Frederick Douglass Boulevard is asking $1.2 million. The luxury tax would be an extra $11,950.

Assemblyman Brian Kavanagh of the East Side proposed a bill to have the luxury tax threshold heightened to $1.75 million residences.

“With the average price of an apartment in Manhattan now exceeding $1 million, what was meant as a tax on the rich has become a tax on the average home-buyer in our area,” Kavanagh said in a statement, as cited by the New York Post. “The runaway real estate values throughout New York City have caused this tax to be applied to one- or two-bedroom apartments that certainly cannot be classified as ‘mansions.’”

Sources have said that Mayor Bill de Blasio might consider creating a new rate for luxury homes that sell for more than $5 million, for example, in line with the mansion tax, as The Real Deal reported in January. The mayor has not raised the idea publicly. [NYP]Mark Maurer

  • Sh!t My Tenants Say

    The should make a show called Million Dollar Listing and show what your REALLY get for $1MM. Not mansions, that’s for sure.

  • SILKY SLIM

    How is the “tax” being used?
    What improvements to the lives of citizens occur as a direct result of this tax?

  • Rick Krasner

    I work for a title insurance agency in Westchester County. Our Governor thinks the high cost of a real estate closing is due to excessive title insurance premiums. Mr. Governor, please take a look at taxes- mansion and mortgage tax to be exact. These taxes add tens of thousands of dollars to the cost of a closing. Our neighbors in NJ and CT don’t have these taxes, and still their overall state, county, and local taxes are less than ours. What’s going on???

    • Jake

      Mario Cuomo brought us the mansion tax. He is not going take it away.

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