You’re probably seeing the tax headlines and wondering how this might affect you as a homebuyer or seller. We’ve put together this quick guide to explain both, and you can always contact us if you’d like to know more.
Usually paid by the buyer within 15 days of closing, the former mansion tax rate was 1% for properties over $1M. The new mansion tax rates increase incrementally after $2M, topping out at 3.9% on properties of $25M or more. The increase will apply to closings on or after July 1, 2019, with the exception of contracts that were entered into prior to April 1, 2019. The mansion tax changes were adopted by Governor Cuomo to generate $365M annually that would benefit everyday New Yorkers and help the city’s economy—specifically with MTA upkeep.
The transfer tax is a tax charged when transferring the property title, and it too was raised on April 1, 2019, to 0.65% for properties exceeding $3M. Tax on properties under $3M remains unchanged at 0.4%. This tax generally falls under the responsibility of a seller, though it is at times instead paid by a buyer—particularly when purchasing property from a sponsor or developer.
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