Increases the sales price threshold for real property conveyances that will trigger additional sales tax.
TITLE OF BILL: An act to amend the tax law, in relation to increasing the amount on which additional taxes are imposed for conveyances of real property
PURPOSE: The purpose of this bill is to increase to $2 million the sale price threshold that triggers the so-called "Mansion Tax." Section 1402-a of the New York State Tax Law currently imposed a 1% tax from buyers who purchase a one, two of three family home or an individual condominium or cooperative unit for $1 million or more.
SUMMARY OF PROVISIONS:
Section 1. Amends Section 1402-a of the Tax Law by raising the triggering of the Mansion Tax to S2 million.
§ 1402. Imposition of tax. (a) A tax is hereby imposed on each conveyance of real property or interest therein when the consideration exceeds five hundred dollars, at the rate of two dollars for each five hundred dollars or fractional part thereof; provided, however, that with respect to (A) a conveyance of a one, two or three-family house and an individual residential condominium unit, or interests therein; and (B) conveyances where the consideration is less than five hundred thousand dollars, the consideration for the interest conveyed shall exclude the value of any lien or encumbrance remaining thereon at the time of conveyance.
JUSTIFICATION: The "Mansion Tax" as it is popularly known was promulgated in 1989 when the average price of a home in New York State was far less than what it is today. With the average price of homes in parts of New York State, particularly in New York City and surrounding suburban counties now exceeding $1 million, what was meant as a tax on the rich - has become a tax on the average homebuyer in our area. The runaway real estate values throughout downstate New York caused this tax to be applied to homes that certainly cannot be classified as "mansions." This important change will ensure that the tax which was originally promulgated to address the purchase of large homes still serves that purpose.
LEGISLATIVE HISTORY: 2007-08: A10110 - (Latimer) Referred to Ways and Means S7425 (Leibell) Referred to Investigations and Government Operations 2011-12: A307 - (Latimer) 01/04/12 referred to ways and means
FISCAL IMPLICATIONS: To be determined
LOCAL FISCAL IMPLICATIONS: To be determined
EFFECTIVE DATE: This act shall take effect on the first of April next succeeding the date it becomes law.
STATE OF NEW YORK ________________________________________________________________________ 2061 2013-2014 Regular Sessions IN SENATE January 10, 2013 ___________Introduced by Sen. LATIMER -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to increasing the amount on which additional taxes are imposed for conveyances of real property THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision (a) of section 1402-a of the tax law, as added by chapter 61 of the laws of 1989, is amended to read as follows: (a) In addition to the tax imposed by section fourteen hundred two of this article, a tax is hereby imposed on each conveyance of residential real property or interest therein when the consideration for the entire conveyance is
[one]TWO million dollars or more. For purposes of this section, residential real property shall include any premises that is or may be used in whole or in part as a personal residence, and shall include a one, two, or three-family house, an individual condominium unit, or a cooperative apartment unit. The rate of such tax shall be one percent of the consideration or part thereof attributable to the resi- dential real property. Such tax shall be paid at the same time and in the same manner as the tax imposed by section fourteen hundred two of this article. S 2. This act shall take effect on the first of April next succeeding the date on which it shall have become a law.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06261-01-3