Governor Andrew Cuomo and the New York State Legislature just adopted the Fiscal Year 2020 (April 2019 through March 2020) budget. The spending plan for the upcoming fiscal year addresses critical issues that impact our industry.
The Real Estate Board of New York was engaged on these issues throughout the budget process and we are currently assessing our state legislative priorities as the session continues throughout the month of June.
Transfer and Mansion Tax Rates
As a result of the State budget just adopted in Albany, hundreds of millions of dollars on an annual basis will flow from the City’s real estate sector toward supporting the region’s mass transit network. The Governor and Legislature agreed to make changes to the New York State Transfer Tax and the Mansion Tax to raise revenue.
1) A new New York State Transfer Tax Rate of 0.65 percent applies for the following:
• Residential 1-3 Family, condo, and co-op sales for $3 million or more
• Commercial sales for $2 million or more
All other sales remain at the old rate of 0.40%.
2) New Mansion Tax rates
Instead of a one percent tax on sales of $1 million or more, the new rate increases based on the sales price.
Effective Date: These tax changes take effect July 1, 2019, and shall apply to conveyances occurring on or after such date other than conveyances which are made pursuant to binding written contracts entered into on or before April 1, 2019, provided that the date of execution of such contract is confirmed by independent evidence, such as the recording of the contract, payment of a deposit or other facts and circumstances as determined by the commissioner of taxation and finance.
These tax changes will result in a substantial outflow of resources from the real estate sector to the region’s mass transit network. It is critical to monitor the impact these tax changes and other tax and policy changes on the federal, state and city level will have on investment, job creation, and property tax revenue generation in New York City moving forward. With that said, we are appreciative that State leaders did not move forward with a misguided recurring pied-a-terre tax that was not well-thought out and had the potential to have significant adverse impacts on job creation and property tax revenues.
The inclusion of congestion pricing is a monumental step forward for New York City that will allow our economy to continue to grow and thrive. Congestion pricing will generate billions of dollars to modernize our transit infrastructure, reduce the crushing burden of traffic congestion in Manhattan and provide environmental benefits. It is now critically important that such funds generated by congestion pricing and the changes made to the Mansion Tax and New York State Transfer Tax be utilized in the most effective manner possible, producing a twenty-first century mass transit system that a global city like New York deserves.
The adopted State budget did not include provisions that would have significantly expanded the application of prevailing wage standards for construction and building service workers. As written, these proposed changes would have dramatically increased costs for numerous projects that are integral to our City and State economy. More time is needed to allow for a more thoughtful approach. As the organization whose members are the predominant employers of unionized building service workers and construction trades, we will continue to work with these labor unions to advocate for policies that promote good wages while being mindful of the need to create jobs and promote economic development and affordable housing.
In Other REBNY News:
Join us as we recognize those who lease your space, help finance your acquisitions, and sell buildings in your city at our 75th Annual Sales Brokers Most Ingenious Deal of the Year Awards Cocktail Party on Tuesday, April from 5:30 to 7:30 p.m.
Enjoy hors d’oeuvres, cocktails, and networking as we announce the winners of our 2018 Sales Brokers Most Ingenious Deal of the Year Awards at Club 101 (101 Park Avenue). Be a part of this coveted awards competition in its milestone, 75th year.
For sponsorship opportunities and registration information visit go.rebny.com/Ingenious75.
Registration is open for the NYRS Spring 2019 Semester! If you’re a motivated agent who seeks a challenge and constantly strives to learn more and hone your craft, we invite you to sign up, take our Learning Labs, and #jointhenetwork.
The curriculum consists of course work totaling 22.5 hours — all of which are approved by NY State to be applied towards Continuing Education credit. This curriculum includes the fair housing and law of agency requirement.
Qualified students who complete all the sessions are awarded the NYRS designation and may use the logo on business cards and marketing materials.
Visit go.rebny.com/NYRSApplication to register now and learn more about NYRS.
Are you interested in becoming a licensed real estate salesperson in New York? Do you learn better in a classroom than online? Register for our next In-Person 75-hour Real Estate Salesperson Licensing Course, accredited by the New York State Department of State.
The course will kick off on April 17 and conclude with the final exam on May 20.
To learn more and register, visit go.rebny.com/SalespersonSpring19.