New York City’s luxury real estate market is in a well-documented slump, but June was an exception—according to the Wall Street Journal, more high-end sales happened that month than in any other on record.
In total, the city recorded approximately $4.8 billion in real estate transactions, which is the highest number in more than 15 years. “It set a record for the most sales above $2 million, sales above $10 million and even sales above $25 million,” per the WSJ.
What gives? Blame it on the mansion tax: The new one-time fee on home purchases of $1 million or higher went into effect on July 1, leading buyers of luxury real estate to scramble to close on pricey properties. (A one-time transfer tax also likely played a part.)
The progressive mansion tax increases as the price of the home does (hence “progressive”): There’s a flat 1 percent tax on homes valued at $1 to $2 million, 1.25 percent on ones valued at $2 to $3 million, and so on; it ultimately tops out at 4.15 percent for homes valued at $25 million or more.
Among the massive closings in June: Amazon CEO Jeff Bezos’s triple-condo buy at 212 Fifth Avenue, totaling approximately $80 million; hedge funder John Griffin’s purchase of 14-16 East 67th Street for $77 million; and a bunch of sales at Vornado’s ultra-exclusive 220 Central Park South, including a villa that sold to a buyer shielded by an LLC for $39 million.
But even as buyers at the high end rushed to save their precious millions, the lower end of the market saw a slump: A StreetEasy report found that there was a 5.8 percent dip in closings on apartments that wouldn’t have been affected by the new tax.