Rich foreign buyers may see NYC luxury market as bargain
New report compares cost of buying and selling in NYC, London, Hong Kong and Singapore
New York commands some of the highest prices in the world for its real estate, but is a relative bargain compared to other alpha cities when it comes to upfront costs, the Wall Street Journal reported.
A new report seen by the Journal compares the cost of buying and selling a $15.26 million property in four top cities – New York, London, Hong Kong and Singapore. Wealthy international buyers have pushed prices for luxury properties up in all four cities, but the cost of purchasing and the amount paid in taxes varies widely.
In Hong Kong, for example, an overseas buyer will pay nearly 25 percent of the $15.26 million purchase price, about $3.75 million, in fees and taxes. Meanwhile in New York, a buyer would pay only $217,890 in fees and taxes for a similarly-priced apartment, the report – created by real estate brokerage Savills, Deutsche Bank and London-based developer Candy & Candy – shows.
Buyers in New York, however, would take a much bigger tax hit than their Hong Kong counterparts during the years they occupied the home and when it came time to sell, the report shows.
In London, upfront stamp duties and fees for a luxury property total 7.1 percent of the total purchase price, or about $1.09 million on a $15.26 million apartment. Singapore takes it up a notch, with overseas buyers paying a steep 18 percent — or about $2.75 million – in purchase fees.
Nick Candy, CEO of Candy & Candy and the developer of the ultra-luxe One Hyde Park, told the Journal that he was concerned that if fees were to rise any further in London, “it will put off international purchasers” and drive them to cities like New York. “The government has done everything it can here to make it difficult for overseas buying,” Candy, who has been on the hunt for his own Manhattan nest, said.
The exorbitant property taxes and selling costs in New York somewhat level things out, Candy added. The cost of selling a $15.26 million property in New York is $1.13 million, more than 12 times what it would be in London. [WSJ] –Hiten Samtani