On March 31, 2019, thirty years after the original Mansion Tax went into effect in 1989, the New York State legislative body passed legislation raising those taxes. Effective July 1, 2019 the New York State Mansion Tax paid by purchasers will move from a fixed 1% for all homes over one million dollars ($1 million) to a new 8-tiered system ranging from 1% for purchases between $1 million and $2 million to as high as 3.9% percent for homes over $25 million. This increase in Mansion tax affects only properties located within New York City, while purchasers of properties outside the City will continue to pay only one percent 1% for purchases of $1 million or more.
Still, it is not only the purchasers who will have to pay more, as sellers have been gifted the same fate. Nonetheless, the increase of the State Transfer Tax was way less volatile than the changes in Mansion Tax. Transfer Tax paid by sellers will raise from 0.4% to 0.65% for homes over $3million and commercial property purchases over $2million.