Brokers lament proposed mansion tax increases

New tax would affect 28 percent of all Manhattan deals last year
May 08, 2015 08:30AM

Residential brokers are sighing over what Mayor Bill de Blasio’s proposed “mansion tax” increases could do to the hot Manhattan market.

The proposed increases, announced this week, would add a 1 percent tax to home sales over $1.75 million and a 1.5 percent tax to home sales over $5 million.

“I would just love the mayor to help me by taking me by the hand to show me that $1.75 million mansion in Manhattan,” Compass president Leonard Steinberg told the Wall Street Journal.

Corcoran Group president Pamela Liebman said, “I think it could really cool the market… We are already at a point where prices are high and there is a limited amount people will want to pay.”

While the city estimated that the new tax would affect 10 percent of all transactions in the city — the Manhattan market would clearly be hit much harder. A review by the newspaper found that last year, 27.6 percent of all Manhattan transactions would have been affected, including 68 percent of townhouse deals and 39.4 percent of condo deals.

However, Real Estate Board of New York president Steven Spinola has voiced his overall support of the plan, and some in the political establishment aren’t concerned about a potential cooling effect.

“There is a real recognition by everybody that the frothiness and the strength of the condo market is something that New Yorkers should be able to collectively take advantage of,” said Alicia Glen, deputy mayor for housing and development. [WSJ] — Tess Hofmann