The Real Estate Board of New York (REBNY) reported that tax revenue generated from investment and residential sales in New York City and New York State decreased by 48 percent from April 2019 to April 2020, and 64 percent from March 2020 to April 2020.
These decreases represent a nearly $72 million loss in tax revenue for the City and State year over year, and a $139 million decrease from month to month.
REBNY created a new Monthly Investment and Residential Sales Report, released today, to track and quantify the impact of the Coronavirus (COVID-19) crisis on the City and the State’s ability to generate taxes needed for essential government services.
“This dramatic loss in tax revenue is alarming,” said REBNY President James Whelan. “The real estate sector is the City’s economic engine. The pandemic has caused that engine to stall and we should expect such alarming trends to carry through May and June in the best-case scenario.”
The real estate industry represented more than half (53 percent) of the City’s total annual tax revenue in the last fiscal year, which is more than double the next closest contributor – personal income tax, which accounts for 21 percent of the City’s annual tax revenue.
The industry employs hundreds of thousands of New Yorkers from building service workers to brokers and generates essential revenue for the City of New York to maintain the salaries of first responders, fund infrastructure improvements and provide for public services like schools, libraries and parks.
Other key findings from REBNY’s special report on investment and residential sales include:
- From April 2019 to April 2020, total residential sales and transactions declined, resulting in a 30 percent decrease in tax revenue. This represents a combined loss of $25 million in tax revenue at the City and State level compared to the previous year.
- From April 2019 to April 2020, total investment sales and transactions declined, resulting in a 71percent decrease in tax revenue. This represents a combined loss of more than $46 million in tax revenue at the City and State level.
REBNY’s Monthly Investment and Residential Sales Report is a compilation of transaction activity for both investment sales and residential sales in New York City and New York State. REBNY is tracking all revenue generated by each asset class and transaction on a monthly basis to monitor changes as a result of the Coronavirus crisis. The report is an analysis of official data from the NYC Department of Finance’s Automated City Register Information System (ACRIS) and captures total sales volume, number of transactions and tax revenue.