New York lost US$755 Million in tax revenue from real estate deals
By BLOOMBERG - October 16, 2020 @ 9:32am
Real estate sales in New York City are plummeting, and so is the tax revenue that's generated with every transaction.
Sales of commercial and residential properties -- everything from office buildings to hotels and individual condos -- are down 45 per cent this year through September, according to a report Thursday by the Real Estate Board of New York.
That's resulted in US$755 million less in city and state tax revenue compared with the first nine months of last year, the trade group said.
The lost revenue stems from transfer and mansion taxes that are levied on real estate trades. The tally doesn't include taxes generated from mortgage recording, suggesting that the hit to public coffers is even higher.
Property sales have tumbled since March when the city and state shut down to slow the spread of Covid-19. Midtown offices are still largely empty while employees work from home, apartment landlords are struggling to find tenants, and the sales market for co-ops and condos is moribund.
The tax revenue contributes to essential services such as transit repairs, salaries for first responders and maintenance of public parks, meaning "the health of the real estate industry is critical to the health of both our city and state," REBNY said. - Bloomberg