Jan 4, 2020

New York City's mansion tax impacts housing cost

Manhattan sunset, seen in September from Arthur Ashe Stadium in Queens, home of the U.S. Open. Photo: TPN/Getty Images

The average price of a Manhattan co-op or condo fell to $1.8 million in the fourth quarter of 2019, according to Douglass Elliman, the largest real estate brokerage in the New York City area, the Financial Times reports.

Why it matters: "The Manhattan property drop is in sharp contrast to the rally on Wall Street, where stock markets have hit new records."

  • The price per square foot declined 6.1 per cent to $1,581.

What's happening: New York City's mansion tax, which took effect July 1, "levied a sliding scale of charges on apartments selling for more than $1m."

  • "Trump’s tax law limited the amount of state and local taxes households could deduct from their federal taxes."
  • That "has been blamed for spurring a flight by wealthy New Yorkers to Florida, which has no personal income tax."

Younger buyers still flooded into Brooklyn and Queens, and sought out studios and one-bedrooms in Manhattan, the FT added.

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