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The Race against Real Estate Taxes

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Purchasers of luxury properties are racing against the clock in an effort to avoid changes to the New York State tax laws effective on July 1, 2019.

Come July 1st 2019, several new tax laws will affect newly purchased or transferred property. The new taxes on real estate transfers and changes to the  “mansion tax” were proposed and passed by the General Assembly to raise money for MTA repairs. The transfer tax is between 1.4% and 2% depending on the value of the property, and the mansion tax can be up to 3.9%.

By closing before July 1 savings can be quite substantial depending on the size of the purchase. For example,  Jeff Bezos’ $80 million dollar condo purchase will result in a  $2.2 million savings if the closing takes place before July 1. While this slight boost in real estate closings before July 1 might seem like a flurry now, luxury property sales are still down from last year, and there is speculation that the increase in taxes will decrease sales further.

NoMad. Billionaires Beating the Tax Bump. (June 2019). Retrieved from https://www.habitatmag.com/Publication-Content/Co-op-Condo-Buyers/2019/2019-June/Rich-Tax-Dodge

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