In a recent article titled “What Is the Mansion Tax in New York City?”, real estate lawyer Natalia A. Sishodia sheds light on this often misunderstood aspect of the city’s real estate market. The article provides a thorough explanation of the mansion tax, highlighting its applicability, rates, and implications for different property types.
The mansion tax, contrary to its name, is not limited to mansions but applies to any home, condo, or co-op purchased in New York City for over $1 million. As Sishodia emphasizes, this threshold can include relatively modest properties due to the city’s high real estate prices.
Initially implemented three decades ago to support the state’s budget by taxing wealthier individuals, the mansion tax has undergone changes over the years. It has evolved from a flat 1% on purchases over $1 million to a scaled structure based on the purchase price. Currently, the rates range from 1% to 3.9%, with the highest tier applicable to properties purchased for $25 million or more.
Importantly, the mansion tax is a financial obligation that falls upon the purchaser of a property, not the seller. Sishodia provides a detailed breakdown of the tax’s applicability and calculation, ensuring clarity for anyone involved in a real estate transaction in New York City.
In estimating closing costs, it is crucial to consider the mansion tax, regardless of whether the property is a single-family home, condo, or co-op. Understanding this tax and its implications on different property types is essential for effective financial planning.
Sishodia PLLC, led by Natalia A. Sishodia, is a reputable law firm providing comprehensive legal services in the field of real estate law. With a deep understanding of the complex New York City real estate landscape, the firm offers personalized guidance and robust legal support to clients, empowering them to undertake real estate transactions with confidence.
Sources: Sishodia PLLC