May
31

New York Mansion Tax? I don’t live in a mansion!

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According to New York State, if the purchase price of an apartment is $1 million or more, you are buying a mansion!  Therefore your purchase would be subject to a 1% Mansion Tax, calculated on the entire purchase price, not just the part that exceeds $1 million.  Buy at $999,999.99 no tax; buy at $1,000,000.00 or more, and you’ll owe $10,000+ tax.

If you’re thinking you’re safe if the purchase price is less than $1 Million, but are paying fees or taxes that would have otherwise been paid by the seller, think again.  Those fees become part of the consideration for the property and could lead to being responsible for the Mansion Tax.

According to Joel E. Miller, a Queens tax lawyer, although the mansion tax is not deductible, however it does increase the property’s tax basis so it will ultimately reduce the tax paid on a gain on the sale of the property.

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