News12 Interview on the NY Mansion Tax

J Philip Faranda January 16, 2018

I was interviewed on News 12 this past Sunday on the “mansion tax,” a 1989 law that adds a 1% tax on properties sold for $1 million or more. In 1989, one million dollars probably did but an actual mansion, but in 2018, in a county with a median home value pushing $700,000, it doesn’t. This is problematic, and adds a dynamic and burden to middle class home buyers and sellers that was supposed to be shouldered by the most affluent.

I’ve seen homes -not mansion, homes- valued around $1 million have the price negotiations hijacked by who will pay this tax, and sellers intentionally price their property under $1,000,000 to avoid the headache. If a home is worth $1,050,000 that is an artificial externality that middle class people should not have to deal with.

There is a push to raise the threshold to $1.7 million, with adjustments for inflation annually. This strikes me as prudent, especially in light of the harm the current arrangement causes New York when consumers have more friendly conditions just a few town away in Connecticut and New Jersey.

While the tax does generate billions in revenue in Albany, a sensible adjustment would make living in New York more attractive, help New Yorkers, and keep our state competitive with our neighboring states. In that sense, a rising tide would raise all boats.

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