Close By July 1 To Avoid New Taxes

Mansion and Transfer Taxes Increasing

New York State is raising taxes on high-end real estate transactions to help pay for much-needed improvements to the subway system. These new rates will effect both buyers and sellers beginning July 1, 2019. Any property closing before then will be taxed by the old rate. Contracts entered into prior to April 1, 2019 that close after July 1, 2019 are not impacted.

Mansion Tax – Paid by Buyer

The current rate is 1% on the sales price of any property selling for $1mil or more. The new tax will remain the same for sales below $2mil, but will then be scaled up relative to the sale price incrementally for sales $2mil and above up to a maximum rate of 3.9%.

New York State Transfer Tax – Paid by Seller
The rate is currently .4%. The rate will remain the same for residential sales less than $3mil, but will increase to .65% for sales above $3mil.

If you are considering buying at a price where you will be impacted by these new rates, now is a good time to lock in a deal and close to avoid the increases. At Spark Realty, we are ready to help you find and close on your residence before July 1, 2019.