NYC Mansion Tax Would Have Snagged 8 Percent of 2014-16 Sales

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By John Herzfeld

A city mansion tax proposal by New York Mayor Bill de Blasio (D) to levy a 2.5 percent surcharge on the sale of residences for more than $2 million would have covered 8 percent of transactions from 2014 through 2016, according to a city budget monitor.

The Feb. 17 analysis by the city Independent Budget Office found that 11,973 of 156,324 residential sales were above the $2 million threshold, with almost 86 percent in Manhattan and 13 percent in Brooklyn. Ten Manhattan neighborhoods accounted for about three-quarters of the high-end sales.

De Blasio has called for the mansion tax, along with a so-called millionaire’s tax on high incomes, in testimony to the state Legislature, which must approve all city taxes. He renewed his call Feb. 13 in his annual State of the City address, saying the mansion tax would raise more than $330 million in annual revenue.

The revenue would be used for rent subsidies for about 25,000 low-income senior citizens.

In the wake of de Blasio’s proposal, the budget monitor said, “some New Yorkers say the $2 million threshold is not indicative of a mansion but rather the cost of a middle-class residence, particularly in Manhattan and parts of Brooklyn.”

Questions Raised

The IBO said it looked at apartment and home sales over the last three years to answer questions raised by Manhattan Borough President Gale Brewer (D).

Sales for $500,000 or less accounted for almost 47 percent of all residential transactions, the analysis found.

Other than Manhattan and the Dumbo-Downtown section of Brooklyn, only Forest Hills and Sunnyside in Queens had more than 10 sales above $2 million in 2016. In Manhattan, 11 sections each had 100 or more, with seven having 200 or more.

Leading the neighborhoods were the SoHo-Tribeca-Civic Center-Little Italy section (600 sales), the Upper East Side-Carnegie Hill section (437), the West Village (427) and the Hudson Yards-Chelsea-Flatiron-Union Square section (371).

To contact the reporter on this story: John Herzfeld in New York at jherzfeld@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

The IBO analysis is at http://src.bna.com/mjZ.

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