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

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