NYC Housing Bubble Implodes: Tribeca Home Prices Plunge 28% As New Taxes Bite
https://www.zerohedge.com/markets/nyc-housing-bubble-explodes-tribeca-home-prices-plunge-28-new-taxes-biteWhen NYC Mayor Bill de Blasio pushed through the controversial "mansion tax" hike on expensive NYC properties (what properties in the city aren't?), real-estate experts warned that it would hurt he housing market. But their pleas that it could cause the unceremonious end of one of the frothiest property bubbles since the crisis fell on deaf ears.
De Blasio's decision raised the mansion tax rate - officially known as the 'transfer tax' rate - from a 1% flat rate to a tiered system. The higher mansion tax rates mean higher closing costs for buyers: For example, the transfer tax due on a $5 million property used to be $50,000. Now, it’s more than double that at $112,500.
It's easy to brush this off as more rich people crying over unsubstantial sums, in reality, many of the people who are buying homes in the $2 million to $3 million range in NYC are (by the city's standards) middle class. They don't always have an extra $50,000 just sitting around. That, and this tax arrived not long after President Trump and the Congressional Republicans decided to punish their blue-state opponents by capping SALT deductions in their 2017 tax plan.
New York City's one notch away from another 1970s fiscal crisis.
