New York Lawmakers Approve Mansion Tax

The pied-à-terre tax that state legislators and Governor Cuomo have been kicking around to fund the woefully low New York budget was approved yesterday with a bit of a twist. Initially discussed as an additional property tax that would start at 0.5% for properties valued at $5 million and gradually increase to 4% for properties valued at more than $25 million, the approved change instead calls for a one-time “mansion tax.”

New York City apartments selling for more than $1 million will be subject to a 1% tax. Beginning at $2 million, the rate graduates up to 4.15% on purchases $25 million and more. The tax is expected to raise $365 million.

On the heels of the mansion tax being passed, private equity funder Jonathan Gallen listed his six-story UWS townhouse for $22.8 million. If he does not sell before the new budget takes effect, the buyer’s tax liability will jump by $619,000.

Other budget items that were approved include a plastic bag ban, and a congestion tax that will require drivers who enter Manhattan below 60th street to pay a fee.

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