New York City officials are looking to increase the mansion tax, levied on high-end real estate sales, in order to raise funds for Mayor Bill de Blasio's $41 billion, 10-year affordable housing development project.
The mansion tax imposes a 1-percent state tax on any real estate sales higher than $1 million, according to The Wall Street Journal. In 2013, the tax raised $259 million in revenue. It is unclear how high the tax hike would be, but an across-the-board increase for all sales over $1 million is unlikely, real estate executives told the Journal. Rather, the city may only raise taxes for the most expensive sales.
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But a broad increase would be less biased, according to Gary Barnett, luxury real estate developer and president of Extell Development. "Anything that's discriminatory against a class of owners, visitors, buyers in New York City sends the wrong message and will be counterproductive," Barnett said.
Some real estate experts warned that this proposal relies too much on the market, which could dry up in the long run and risk the tax revenue stream.