Here's a dirty little tax secret, via the Times today, which certainly hasn't hurt the city's finances over the past few years, and it has to do with the magical, mystical half-million-dollar mark. Tax attorneys out there, try to look surprised:
Unlike the income tax rate, which declines when applied to lower incomes, the higher real estate transaction tax rate applies to the full sale price. So if a home sells for just a few dollars more than $500,000, the seller must pay 42 percent more in transaction taxes on the entire amount, not just the portion that exceeds the half-million-dollar mark.We'd love to know what the average one-bedroom was going for when that limbo bar went up.
· Slump? Real Estate Tax Revenue Keeps Rising [NYT]