By Josh Barbanel
The Wall Street Journal
New York City Mayor Bill de Blasio is calling for a new tax on the sale of houses, co-ops and condominiums worth more than $1.75 million, part of a wider political deal that would extend tax breaks for developers and create another revenue source for city housing programs.
The proposal was endorsed by the Real Estate Board of New York, an industry group long dominated by large developers. “It is not what we would have recommended but we are supporting the whole plan because it will create more housing,” Steven Spinola, president of the real estate board, said of the new tax.
For some rank-and-file real-estate brokers, however, the deal wasn’t necessarily welcome. They said the new “mansion tax” of up to 1.5% on top of existing transfer taxes paid by buyers and sellers could put the brakes on the city’s roaring residential-property market.
“I would just love the mayor to help me by taking me by the hand to show me that $1.75 million mansion in Manhattan,” said Leonard Steinberg, president of Compass, a brokerage based in Manhattan.
The city estimated the tax would affect 10% of all transactions. But in Manhattan it would affect many more deals. A review of market-rate transactions found that 27.6% of all Manhattan deals would have required the payment of the new tax last year, including 68% of townhouse sales, and 39.4% of condo transactions.
Pamela Liebman, president of the Corcoran Group, said she was briefed by the real estate board some time ago and that she opposed the tax.
“I think it could really cool the market,” she said. “We are already at a point where prices are high and there is a limited amount people will want to pay.”
While the idea of a mansion tax has been discussed for months, with some debate centering on how much money it would generate for the city, Thursday’s proposal had political winds behind it.
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