Mansion tax could keep home prices under $1.75M

IBO report predicts de Blasio’s proposed law could influence sellers

New York /
Jun.June 01, 2015 04:50 PM

Mayor Bill de Blasio’s proposed mansion tax could influence home sellers to keep their prices under $1.75 million for fear of discouraging buyers with the tax hike above that threshold, according to a new report by the Independent Budget Office.

De Blasio proposed the tax last month in conjunction with his 421a plan. New York state and the city already have a mansion tax of 2.825 percent on purchases over $1 million, Crain’s reported. The proposal would tax an additional 1 percent on purchases over $1.75 million and 1.5 percent on any portion of the price exceeding $5 million.

The monitor found that a homebuyer making a $1.75 million purchase would pay $49,437.50 in taxes, while for a $1.76 million purchase they would pay $67,320. A $10,000 price differential would result in a $17,882 bump in taxes, which could induce home sellers to stay under the $1.75 million line, justifying brokers’ fears.

Properties over $5 million would not be as seriously affected because the tax is only on the amount over $5 million. [Crain’s] — Tess Hofmann


Related Articles

arrow_forward_ios
Attorney General Letitia James and Mayor Bill de Blasio (Getty)
Tish James, Council ask mayor to delay lien sale that he just OK’d
Tish James, Council ask mayor to delay lien sale that he just OK’d
‘Paying the severance would have cost more’: New law pushes hotels to reopen
“Paying the severance would have cost more”: New law pushes hotels to reopen
“Paying the severance would have cost more”: New law pushes hotels to reopen
Department of City Planning's Anita Laremont (iStock)
City Planning votes to restrict hotel development
City Planning votes to restrict hotel development
Mayor Bill de Blasio (Getty, iStock)
Mystery group sues to stop de Blasio from restricting hotel development
Mystery group sues to stop de Blasio from restricting hotel development
Photo Illustration of New York Mayor Bill de Blasio (Getty)
New York Mayor Bill de Blasio starts renovation work on Park Slope home
New York Mayor Bill de Blasio starts renovation work on Park Slope home
(Getty)
De Blasio commits $90M more to rebuild Chinatown community center
De Blasio commits $90M more to rebuild Chinatown community center
Council member Adrienne Adams and Mayor Bill de Blasio (Getty, Facebook via Adams)
Task force lays out possible changes to city’s tax lien sale
Task force lays out possible changes to city’s tax lien sale
De Blasio taps Anita Laremont to take over Marisa Lago’s City Planning roles
De Blasio taps Anita Laremont to take over Marisa Lago’s City Planning roles
De Blasio taps Anita Laremont to take over Marisa Lago’s City Planning roles
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...