In New York, A $1 Million House Doesn’t Make You a Rich Person Anymore

The inevitable end point.
The inevitable end point.

It’s not exactly news that in much of New York, $1 million doesn’t necessarily make you the highest of rollers—there are places out there going for $85,000/month—but it can still be startling how far such a huge amount of money won’t get you these days. As such, this Post article about New York’s hugely lucrative “mansion tax”—in which the state collects 1% of a luxury home’s selling price—is interesting, not so much because it’s bringing in a ton of money (no big surprise there), but because of what constitutes a “mansion” here. The tax applies to homes that cost $1 million or more, and is now deemed by some a burden on the city’s middle class rather than its intended one-percenter targets.

It’s easy to wave away the complaints as a tax dodge by rich jerks, but then, the $1 million threshold hasn’t changed since the measure was approved in 1989, while New York’s economy most decidedly has. As such, East Side Assemblyman Brian Kavanagh has now introduced legislation to raise the minimum to $1.75 million, and said, “With the average price of an apartment in Manhattan now exceeding $1 million, what was meant as a tax on the rich has become a tax on the average home-buyer in our area. The runaway real estate values throughout New York City have caused this tax to be applied to one- or two-bedroom apartments that certainly cannot be classified as ‘mansions.'” Hmm. If million-dollar non-mansions are a dime a dozen these days, looks like we might have to adopt the “castle” classification after all?

Follow Virginia K. Smith on Twitter @vksmith.


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