New York legislators are weighing a new tax on all-cash home purchases over $1 million.
Under the proposal, buyers would be on the hook to pay 1 percent of the purchase price to cover the levy, sources told Bloomberg. The tax on deals in the city alone is expected to generate $160 million in revenue to help cover the city’s budget deficit.
Lawmakers are also considering expanding the tax across the state, meaning it would apply to some of New York’s other centers of luxury real estate, including the city’s suburbs, the Hamptons and the Hudson Valley.
The proposal would allow the state to tax home purchases that were previously exempt from its mortgage recording tax, which required buyers of certain property types to pay roughly 1 percent of the loan amount. Buyers financing their purchases in New York City are subject to an additional 1 to 2 percent, depending on the size of their loan.
A spokesperson for Gov. Kathy Hochul’s office told Bloomberg that the governor struck a deal with lawmakers on “many of the major elements” included in her $268 billion budget proposal, the full version of which she still hasn’t delivered nearly two months after the deadline.
Mayor Zohran Mamdani supports the tax, according to a spokesperson.
Some in the real estate industry have pushed back on the proposal, news of which is coming after Hochul announced a planned pied-à-terre tax, targeting second homes in New York City valued at $5 million or more.
Jim Whelan, the president of the Real Estate Board of New York, said in a statement that New York residents are already responsible for a significant tax burden and criticized the move as a potential deterrent for home purchases, taxes on which already contribute substantially to the city’s revenue.
“The City’s budget issues will not be solved by more taxes,” Whelan said in the statement. “Putting even more costs on home buyers and sellers will further discourage transactions and threaten existing revenue collected by the State, City, and MTA.”
All-cash deals accounted for 60 percent of home sales in New York City during the first half of 2025, according to data from the nonprofit Center of New York City Neighborhoods. Nine out of 10 deals over $3 million were all cash.
— Sheridan Wall
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