The city has come up with one new way to help reach Mayor Bill de Blasio's ambitious affordable housing goals: raise the "mansion tax," or the extra fee tacked on to purchases of apartments over $1 million. The Journal outlines the proposed hike, which could raise tens of millions of dollars to be put towards constructing affordable housing. Currently, the extra tax on those expensive apartments is 1 percent.
One caveat: the proposed hike hasn't been floated in any public documents yet, just weighed and debated behind closed doors at City Hall and in the upper echelons of the real estate industryit's even unclear whether the de Blasio administration will push for this as a priority. And even if it does, it would have to pass before the state legislature first. So no firm projections for revenue are pinned down.
But developers and city officials told the Journal that that the tax would likely be a sliding scale, with apartments that cost, say, more than $10 million taxed more than apartments priced at $2 million. Again, the numbers haven't really been run, but the Independent Budget Office once calculated how much revenue an additional 0.5 percent tax on apartments over $5M would generate. In 2015, that would total $34 million. To put that number in perspective, the current mansion tax earned for $259 million in the 2013 fiscal year.
A mansion hike would target a different group of deep-pocked real estate titans than one policy the administration has implemented thus far: that any developer seeking a zoning change would be required to build affordable housing.
So is this more or less palatable than that? Or than the a pied-a-terre tax? Discuss.
· City Eyes Mansion-Tax Boost to Assist Affordable Housing [WSJ]
· Mansion Tax coverage [Curbed]