Enacts the "middle-class homebuyer protection act" to increase the additional tax imposed on residential real property if the consideration for the conveyance from $1,000,000 to $4,500,000 where the residential structure contains five thousand square feet or more of livable interior space.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10812
SPONSOR: Blumencranz TITLE OF BILL:
An act to amend the tax law, in relation to redefining the applicability
of the additional real estate transfer tax commonly known as the
"mansion tax", providing protections for middle-class and first-time
homebuyers, and indexing thresholds for inflation
PURPOSE:
This bill reforms New York's "mansion tax" to ensure it applies only to
true luxury residential properties, while protecting middle-class fami-
lies and first-time homebuyers from an outdated and misleading tax
burden.
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the bill establishes the short title as the "Middle-Class
Homebuyer Protection Act."
Section two sets forth the legislative intent, recognizing that the
current mansion tax no longer reflects modern housing market realities
and unfairly burdens middle-class homebuyers, particularly in high-cost
regions such as Long Island.
Section three amends section 1402-a of the tax law to:
*Increase the price threshold for applicability of the tax to
$4,500,000;
*Establish a new, objective definition of a taxable "mansion," requiring
that a property must both exceed the price threshold and contain at
least 5,000 square feet of livable interior space;
*Provide for annual inflation indexing of the threshold based on the
Consumer Price Index (CPI-U);
*Exempt first-time homebuyers purchasing a primary residence from the
tax; and
*Clarify that the tax shall not apply to owner-occupied primary resi-
dences unless such properties meet the newly defined luxury criteria.
Section four contains a severability clause.
Section five provides for an immediate effective date.
JUSTIFICATION:
New York's mansion tax was enacted in 1989 to target luxury real estate
transactions. At that time, a $1 million home represented a true
mansion. Today, however, due to decades of inflation and rising housing
costs, particularly in suburban regions like Long Island, that same
price point often reflects modest, middle-class homes.
As a result, the tax has drifted far from its original intent. It now
imposes a significant and often unexpected financial burden on middle-
class families, first-time homebuyers, and working professionals seeking
to purchase a home in an increasingly competitive housing market.
Simply increasing the price threshold, while helpful, does not fully
address the structural flaw in current law: the definition of a
"mansion" is based solely on price, rather than the actual character-
istics of the property.
This legislation corrects that flaw by introducing a commonsense, dual
approach-requiring both a significantly higher price threshold and
objective physical characteristics, such as square footage, before the
tax applies. By doing so, the bill ensures that only true luxury proper-
ties are subject to the tax.
Additionally, the bill protects first-time homebuyers-who are partic-
ularly vulnerable to upfront closing costs-by providing a full exemption
when purchasing a primary residence. This provision supports homeowner-
ship, strengthens communities, and helps retain young families and
professionals in New York.
The inclusion of inflation indexing ensures that the tax will remain
aligned with economic reality going forward, preventing the need for
future legislative corrections.
In sum, this bill restores fairness, transparency, and integrity to a
tax that has become outdated, misleading, and burdensome to those it was
never intended to impact.
LEGISLATIVE HISTORY:
New bill. While prior legislation has sought to increase the price
threshold for the mansion tax, this bill represents a comprehensive
reform by redefining the tax's applicability, incorporating objective
property characteristics, and providing targeted protections for first-
time and middle-class homebuyers.
FISCAL IMPLICATIONS:
This bill may result in a reduction of revenue from the additional real
estate transfer tax; however, such reduction reflects the Legislature's
intent to realign the tax with its original purpose of targeting only
true luxury properties.
Any fiscal impact may be partially offset by increased housing market
activity and reduced distortion in pricing behavior.
EFFECTIVE DATE:
This act shall take effect immediately,
STATE OF NEW YORK
________________________________________________________________________
10812
IN ASSEMBLY
April 1, 2026
___________
Introduced by M. of A. BLUMENCRANZ -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to redefining the applicability
of the additional real estate transfer tax commonly known as the
"mansion tax", providing protections for middle-class and first-time
homebuyers, and indexing thresholds for inflation
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "middle-class homebuyer protection act".
3 § 2. Legislative intent. The legislature hereby finds and declares
4 that the additional real estate transfer tax imposed pursuant to section
5 1402-a of the tax law, commonly referred to as the "mansion tax", was
6 enacted in 1989 to target luxury real estate transactions, but has not
7 been adjusted for inflation or evolving housing market conditions.
8 The legislature further finds that, particularly in high-cost regions
9 such as Long Island and other suburban areas, modest middle-class homes
10 are routinely subject to this tax solely due to price inflation, despite
11 lacking any characteristics commonly associated with luxury or mansion-
12 style residences. It is therefore the intent of the legislature to
13 protect middle-class and first-time homebuyers, promote fairness and
14 transparency in taxation, and ensure that taxes intended to apply to
15 luxury properties are imposed only upon properties that objectively meet
16 that standard.
17 § 3. Section 1402-a of the tax law, as added by chapter 61 of the laws
18 of 1989, subdivision (b) as amended by section 2 of part OOO of chapter
19 59 of the laws of 2019, is amended to read as follows:
20 § 1402-a. Additional tax. (a) In addition to the tax imposed by
21 section fourteen hundred two of this article, a tax is hereby imposed on
22 each conveyance of residential real property or interest therein when
23 the consideration for the entire conveyance is [one] four million five
24 hundred thousand dollars or more. [For purposes of this section, resi-
25 dential real property shall include any premises that is or may be used
26 in whole or in part as a personal residence, and shall include a one,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15353-01-6
A. 10812 2
1 two, or three-family house, an individual condominium unit, or a cooper-
2 ative apartment unit. The rate of such tax shall be one percent of the
3 consideration or part thereof attributable to the residential real prop-
4 erty.] Such tax shall be paid at the same time and in the same manner as
5 the tax imposed by section fourteen hundred two of this article.
6 (a-1) For purposes of this section, the additional tax imposed pursu-
7 ant to this section shall apply only to conveyances of residential real
8 property that meet both of the following criteria:
9 1. The consideration for the conveyance exceeds four million five
10 hundred thousand dollars; and
11 2. The residential structure contains five thousand square feet or
12 more of livable interior space, as reflected in the most recent assess-
13 ment records or other documentation acceptable to the commissioner.
14 (b) Notwithstanding the provisions of subdivision (a) of section four-
15 teen hundred four of this article, the additional tax imposed by this
16 section shall be paid by the grantee. If the grantee has failed to pay
17 the tax imposed by this article at the time required by section fourteen
18 hundred ten of this article or if the grantee is exempt from such tax,
19 the grantor shall have the duty to pay the tax. Where the grantor has
20 the duty to pay the tax because the grantee has failed to pay, such tax
21 shall be the joint and several liability of the grantor and the grantee.
22 (c) Except as otherwise provided in this section, all the provisions
23 of this article relating to or applicable to the administration,
24 collection, determination and distribution of the tax imposed by section
25 fourteen hundred two of this article shall apply to the tax imposed
26 under the authority of this section with such modifications as may be
27 necessary to adapt such language to the tax so authorized. Such
28 provisions shall apply with the same force and effect as if those
29 provisions had been set forth in this section except to the extent that
30 any provision is either inconsistent with a provision of this section or
31 not relevant to the tax authorized by this section.
32 (d) Beginning on January first of the calendar year following the
33 effective date of this subdivision, and annually thereafter, the dollar
34 threshold set forth in paragraph one of subdivision (a-1) of this
35 section shall be adjusted by the commissioner in accordance with the
36 consumer price index for all urban consumers (CPI-U), or any successor
37 index, as published by the United States department of labor. Such
38 adjusted threshold shall be rounded to the nearest ten thousand dollars
39 and shall be published no later than December first of each year.
40 (e) Notwithstanding any other provision of law, the additional tax
41 imposed pursuant to this section shall not apply to a conveyance of
42 residential real property to a first-time homebuyer, provided that such
43 property shall be occupied as the purchaser's primary residence. For
44 purposes of this subdivision, a "first-time homebuyer" shall mean an
45 individual who has not held an ownership interest in a residential
46 dwelling within the three-year period preceding such conveyance.
47 (f) The additional tax imposed pursuant to this section shall not
48 apply to owner-occupied primary residences unless the conveyance meets
49 the definition of residential property as set forth in subdivision (a-1)
50 of this section.
51 § 4. Severability clause. If any clause, sentence, paragraph, subdivi-
52 sion, section or part of this act shall be adjudged by any court of
53 competent jurisdiction to be invalid, such judgment shall not affect,
54 impair, or invalidate the remainder thereof, but shall be confined in
55 its operation to the clause, sentence, paragraph, subdivision, section
56 or part thereof directly involved in the controversy in which such judg-
A. 10812 3
1 ment shall have been rendered. It is hereby declared to be the intent of
2 the legislature that this act would have been enacted even if such
3 invalid provisions had not been included herein.
4 § 5. This act shall take effect immediately.
