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A02194 Summary:

BILL NOA02194
 
SAME ASSAME AS S01962
 
SPONSORBuchwald
 
COSPNSRZebrowski, Lavine, O'Donnell
 
MLTSPNSRWright
 
Amd 1402-a, Tax L
 
Increases the sales price threshold for real property conveyances that will trigger additional sales tax.
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A02194 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2194
 
SPONSOR: Buchwald (MS)
  TITLE OF BILL: An act to amend the tax law, in relation to increasing the amount on which additional taxes are imposed for conveyances of real property   PURPOSE: The purpose of this bill is to adjust by inflation the sale price thres- hold that triggers the so-called "Mansion Tax."   SUMMARY OF PROVISIONS: Section 1 amends Section 1402-a of the Tax Law by adjusting for inflation the sale price threshold for the real property transfer tax referred to as the "Mansion Tax" so that instead of the threshold being $1 million, it is $1 million adjusted by inflation. The inflation adjustment is based on the Consumer Price Index (CPI) and adjusts once a year based on the inflation that has occurred since the mansion tax was established. Section 2 sets forth the effective date.   EXISTING LAW: Currently, section 1402-a of the New York State Tax Law imposes a 1% tax on buyers who purchase a one, two or three family homes or an individual condominium or cooperative unit for $1 million or more. This tax paid in addition to the regular real estate transfer tax that all real property sales are subject to, is known as the "mansion tax."   JUSTIFICATION: The "Mansion Tax" today is no longer limited to taxing mansions. This additional tax was established in 1989 when the average price of a home in New York State was far less than what it is today. With the average price of homes in parts of New York State, particularly in New York City and surrounding suburban counties now exceeding $1 million, what was meant as a tax on the rich has become a tax on average homebuyers. The increasing real estate values throughout downstate New York caused this tax to be applied to homes that would never be called "mansions:" This important change will ensure that the tax which was originally promul- gated to address the purchase of large homes still serves that purpose. Moreover, passage of this bill will spur more purchases of homes, which will revitalize communities and encourage economic activity, like the purchasing of furniture and remodeling services, providing sales tax revenue.   LEGISLATIVE HISTORY: 2015/2016 A.79 (Buchwald) - Referred to Ways and Means / S.548 (Latimer) - Referred to Investigations and Government Operations 2013/2014: A.6612A (Buchwald) - Referred to Ways and Means / S. 2016A (Latimer) - Referred to Investigations and Government Operations 2011-12: A.307 (Latimer) - Referred to Ways and Means 2007-08: A.10110 (Latimer) - Referred to Ways and Means   FISCAL IMPLICATIONS: To be determined.   IMPACT ON REGULATION OF BUSINESSES AND INDIVIDUALS: None.   EFFECT ON FINES, TERMS OF IMPRISONMENT OR OTHER PENAL SANCTIONS: None.   EFFECTIVE DATE: This act shall take effect on the first of April next succeeding the date it becomes law.
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A02194 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          2194
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 17, 2017
                                       ___________
 
        Introduced  by M. of A. BUCHWALD, ZEBROWSKI, LAVINE, O'DONNELL -- Multi-
          Sponsored by -- M. of A. WRIGHT --  read  once  and  referred  to  the
          Committee on Ways and Means
 
        AN  ACT  to  amend  the tax law, in relation to increasing the amount on
          which additional taxes are imposed for conveyances of real property

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Subdivision (a) of section 1402-a of the tax law, as added
     2  by chapter 61 of the laws of 1989, is amended to read as follows:
     3    (a) In addition to the tax imposed by section fourteen hundred two  of
     4  this  article, a tax is hereby imposed on each conveyance of residential
     5  real property or interest therein when the consideration for the  entire
     6  conveyance is one million dollars (adjusted for inflation) or more.  For
     7  purposes  of  this  section, residential real property shall include any
     8  premises that is or may be used in whole or in part as a personal  resi-
     9  dence,  and shall include a one, two, or three-family house, an individ-
    10  ual condominium unit, or a cooperative apartment unit. The rate of  such
    11  tax  shall be one percent of the consideration or part thereof attribut-
    12  able to the residential real property. Such tax shall  be  paid  at  the
    13  same  time and in the same manner as the tax imposed by section fourteen
    14  hundred two of this article.   For purposes of  this  section,  the  one
    15  million  dollar  amount shall be adjusted for inflation in each calendar
    16  year by multiplying the amount by the ratio of (i) the  average  monthly
    17  value  of the consumer price index for the twelve month period ending on
    18  June thirtieth of the immediately preceding  calendar  year  divided  by
    19  (ii)  the  average  monthly  value  of  the consumer price index for the
    20  twelve month period ending on June thirtieth of the year in  which  this
    21  subdivision  became  a law, and rounding the amount to the nearest thou-
    22  sand dollars. For purposes of this section,  the  consumer  price  index
    23  means the consumer price index (for all urban consumers, U.S. city aver-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00905-01-7

        A. 2194                             2
 
     1  age,  all  items,  not  seasonally  adjusted) as published by the United
     2  States department of labor.
     3    §  2. This act shall take effect on the first of April next succeeding
     4  the date on which it shall have become a law.
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