Topline
New York City homes worth more than $1 million and purchased with cash could face a new tax, according to Bloomberg, with state lawmakers considering the latest measure to generate revenue from real estate deals.
The tax is being discussed in budget negotiations.
Photo by Sebastian Gollnow/picture alliance via Getty Images
Key Facts
New York lawmakers are planning the tax, Bloomberg reported, citing unnamed people familiar with the state budget negotiations who noted the proposal would be levied at 1% of the buying price and be paid by buyers.
The legislators are also considering expanding the tax to $1 million or more cash purchases in the state that would incorporate the suburbs and upstate New York, Bloomberg added.
The tax in New York City alone could generate up to $160 million, according to the unnamed sources Bloomberg cited.
A spokesperson for Gov. Kathy Hochul, D-N.Y., told Bloomberg she “announced a general agreement with the State Legislature on many of the major elements of the FY 2027 Budget,” adding the finalized budget would provide additional details.
The new tax is the latest move out of New York to improve the city’s budget through property tax hikes, as New York City Mayor Zohran Mamdani and Hochul are also trying to push through a pied-à-terre tax on secondary homes worth $5 million or more in the city.
Forbes has reached out to the offices of Hochul and Mamdani.
What To Watch For
The full New York state budget has yet to be approved as Hochul has said agreements have been made on key matters including funding for universal child care, rising energy costs and infrastructure. The budget was due on April 1 before a series of extensions were passed, with lawmakers now aiming to finalize the budget before the end of May.
Key Background
New York has floated more dramatic property taxes since Mamdani came into office this year. The mayor, who ran on affordability during New York City’s mayoral election last year, proposed a 9.5% property tax hike that sought to raise around $3.5 billion. Mamdani dropped the proposal this week following backlash from homeowners and the real estate sector. However, the mayor, with support from Hochul, is advancing the pied-à-terre tax estimated to generate at least $500 million to improve what Mamdani has called a $12 billion budget gap. Hochul has not generally supported taxes on the wealthy, but since the pied-à-terre tax targets people whose official, primary residences are outside New York, she is more supportive of it than other proposals against wealthy residents, according to The New York Times. Billionaire Ken Griffin’s hedge fund Citadel suggested last month it may review its $6 billion planned expansion in Midtown after Mamdani announced the pied-à-terre tax in a video that was recorded outside the building that houses Griffin’s New York City penthouse.
Further Reading
Ken Griffin’s Citadel Suggests $6 Billion NYC Project May Be At Risk Over Mamdani Tax (Forbes)
Trump Warns Mamdani Over Property Tax Hikes—Amid Mayor’s Spat With Billionaire Ken Griffin (Forbes)
