New York Tax on NYC Cash Home Purchases Close to Collapsing – Bloomberg
A proposal to tax all-cash real estate purchases over $1 million in New York City will likely be dropped from the state budget, Bloomberg reported, citing people familiar with the talks.
State lawmakers had considered the levy to help close the city’s budget deficit. The tax would have charged buyers 1% of the purchase price.
The state still plans to enact a pied-à-terre tax on expensive second homes, though the budget has not been finalized. Officials expect the tax, affecting about 10,000 properties worth more than $5 million citywide, to generate $500 million in additional revenue next fiscal year.
Both proposals targeted wealthy New Yorkers and stemmed from Mayor Zohran Mamdani’s pledge to raise taxes on the richest residents. Governor Kathy Hochul has resisted calls to raise income or corporate taxes. The city faces a multibillion-dollar budget gap and is relying on state revenue to help close it.
All-cash transactions have increased as high mortgage rates deter financing. Cash offers are also attractive in the city’s competitive housing market because they close faster and are less likely to collapse during mortgage approval.
Cash purchases accounted for more than 60% of nearly 18,000 New York City transactions in the first half of 2025, according to the nonprofit Center for NYC Neighborhoods.
The real estate industry criticized the proposal, saying it would burden buyers and sellers and threaten existing government revenue. Some experts also argued there were too many loopholes for the tax to raise significant money.
