(NEW YORK, NY) — On July 1 2019, New York City’s “progressive mansion tax,” part of the FY2020 budget, which levies a one-time fee on home purchases of $1 million or higher was enacted. Therefore, this fee increases with the price of the home and goes from 1 percent to 4.15 percent tax.
For homes valued at $1 to $2 million, there is a straight 1 percent tax. Homes prices between $2 to $3 million have a 1.25 percent tax, and so on. But, for homes at $25 million and higher, there is a whopping 4.15 percent tax.
For a closer look at the mansion tax increments, take a look at Bloomberg’s table.
The looming mansion tax spurred closing in the final weeks of June, but not enough to offset the weakening New York City residential market, the Wall Street Journal reports.
Donna Olshan, who tracks luxury sales prices $4 million and higher, found that contracts to those specifications fell by over 16 percent in the second quarter, when compares to the same time last year. This marks the slowest sales pave for the luxury market in seven years.
The brokerage firm, CORE, reported that second-quarter buyers had an average discount of nine percent off the initial listing price. This marks the highest discount in a long time.
This quarter has proven that buyers are even more cautious when it comes to buying real estate. “Rich people didn’t get rich by wasting money,” said the vice-chairman of Stribling to the Journal, when speaking on tax increases.