Friday, October 25, 2019

New De Blasio "Mansion" Tax is Causing a Free Fall in Real Estate Prices in Some NYC Neighborhoods

Mayor de Blasio
Well the NYC commie mayor sure did it this time with his "mansion" tax.

In Manhattan’s most-expensive neighborhoods price declines for previously owned apartments are accelerating.

In Tribeca, resale prices fell 28% year-over-year, the most for any neighborhood, to a median of $2.25 million in the third quarter, according to property listings website StreetEasy reports Bloomberg. Values in both Greenwich Village and Chelsea dropped 15%. The Upper West Side and the area that includes Soho were each down 14%.

“Things that are selling are selling for lower prices, and expensive things, overall, are not selling,” said Grant Long, senior economist at StreetEasy.

De Blasio's decision raised the mansion tax rate - officially known as the 'transfer tax' rate - from a 1% flat rate to a tiered system. The higher mansion tax rates mean higher closing costs for buyers: For example, the transfer tax due on a $5 million property used to be $50,000. Now, it’s more than double that at $112,500.

ZeroHedge comments:
It's easy to brush this off as more rich people crying over unsubstantial sums, in reality, many of the people who are buying homes in the $2 million to $3 million range in NYC are (by the city's standards) middle class. They don't always have an extra $50,000 just sitting around. That, and this tax arrived not long after President Trump and the Congressional Republicans decided to punish their blue-state opponents by capping SALT deductions in their 2017 tax plan.


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