LEGISLATIVE AFFAIRS: Stop the Transfer Tax Hike in Yonkers
Philip Weiden | May 2, 2016
The proposed budget for the city of Yonkers includes a 100% increase in the real estate transfer tax. The tax would be increased to 3% from the current 1.5%. This would be devastating for home values in Yonkers as well as to residents needing to sell their homes. In the case of a $500,000 home sale, this would add an additional $7,000 on the sale of a house to be paid by the seller.
Our multiple listing database shows that as of April 21 there were 225 single family houses in Yonkers that are listed for sale with our Realtor members. The way the tax is currently structured, the seller pays the tax and the cost of the tax is likely to become embedded in the sales price of the home and have a negative impact on the local real estate market. According to the latest economic numbers released on April 28, the national home ownership rate continues to trend downward and was below 64% the third lowest rate on record. Rents over the last year have gone up 8% nationally and are significantly higher in New York than the national median asking price of around $800-$900 a month.
Short sales are also a big issue in Yonkers with many distressed properties on the market. Mortgage debt relief has been extended through the end of 2016, which allows short sellers to have income taxes on the forgiven debt owed to the government, waived when they take a loss on the sale of their home. Any increase in the transfer tax will be devastating to short sellers. The numbers indicate that over the last several years in Yonkers short sales have gone up and not down.
I would also note that New York State also has a transfer tax statewide that would add an additional $2,000 expense to the median $499,000 transaction. Realtors will tell you that transactions can fall apart over lesser amounts than this and that a transfer tax hike would damage an already fragile market in Yonkers.
In future columns I will touch on more mandate relief measures that Albany can take. New Yore State must provide mandate relief sooner rather than later. The Yonkers city budget will likely be passed by June so we have only a little bit of time to mobilize. HGAR leadership is meeting with all of the council members and the Mayor to oppose this tax hike. We have sent each of them a detailed letter stating why we oppose this onerous increase.
HGAR will be sending out a call for action, which we will ask all our members to respond to. We are asking everyone, including the general public, to stand in opposition to this proposed transfer tax hike. Stay tuned for updates on this story.