For brokers who do business across state lines, New York state has just enacted a change in the mansion tax rate. Previously, it had been uniformly applied on properties sold for over $1 million dollars. Now, the tax rate is a graduated rate that increases as the selling price increases. The change was prompted by a purchase in NYC by Ken Griffen of a condo at $240 million. One concern of the city and state is money laundering when shell companies purchase expensive properties. To solve this problem, the new tax will continue to charge buyers properties over $1 million at 1%, but over $3 million will be taxed at 1.5%; a $6 million sale will be taxed at 2.25%; a $12 million sale 3.25%; and sales over $25 million will pay 3.9%. In addition, the state transfer tax for city dwellers will increase from 0.4% to 0.65%. As the Forbes article summed it up, “That effectively means that the future Ken Griffins will pay over 3% more in taxes after July 1 of this year, when the changes go into effect. For Mr. Griffin, that would have meant over $7.2 million in additional taxes on his purchase.”
Thanks to REALTOR Gladys Montgomery for sharing!