The Real Estate Board of New York (REBNY), the City’s leading real estate trade association, reported that tax revenue generated from investment and residential sales in New York City and New York State decreased by 76% from May 2019 to May 2020, and 40% from April 2020 to May 2020.
These decreases represent a $145 million loss in tax revenue for the City and State year over year, and a $31 million decrease from month to month. Since the start of the crisis in March 2020, there has been a decline of more than $160 million in tax revenue.
“This data confirms the unprecedented economic crisis facing our City and State. Our local economy must reopen in a healthy way. We also need our public officials to put in place policies that will restart such economic activity rather than deepen the crisis,” said REBNY President James Whelan.
“Promoting more real estate sales and transactions will produce the tax revenue the City and State need to pay for vital government services from education to infrastructure improvements.”
The real estate industry, which serves as the fundamental driver of New York City’s economy, represented more than half (53%) 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% 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 2020 to May 2020, total sales volume declined 26%.
- From May 2019 to May 2020, total residential sales and transactions declined, resulting in a 53% decrease in tax revenue. This represents a combined loss of $45 million in tax revenue at the City and State level compared to the previous year.
- From May 2019 to May 2020, total investment sales and transactions declined, resulting in a 93% decrease in tax revenue. This represents a combined loss of more than $100 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 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. 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.
Download REBNY’s Monthly Investment and Residential Sales Report here. Download the Appendix Data for the Monthly Investment and Residential Sales Report here. For more information about REBNY research reports, visit go.rebny.com/Reports.