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Due to 2019 changes in the law, realtors and brokers need to become more aware of what it means to sell or lease properties in regard to new green standards. These laws should also be considered in conjunction with recent budget changes that have been enacted by The New York State Legislature.
Being aware of budget laws is paramount since they will go into effect on or after July 1st 2019. Their main focus will be to bring in more property tax dollars and investment money to New York. In return, the legislature hopes that every real estate broker will sell more green and environmentally friendly properties that cost less to heat and air-condition.
How will the new real estate tax laws work?
The law will provide for two major changes in the enforcement of State Transfer Taxes and Mansion tax rates in the New York real estate market.
- New Real Estate Transfer Taxes
Except for binding real estate agreements made on or before April 1, 2019, all new purchasers of city and state properties will have to pay an increased NYS transfer tax of .65 percent for residential 1-3 family condominiums and co-op sales of $3 million or more. The transfer tax increase will also apply to all commercial sales of real estate that exceed $2 million. Otherwise, the old transfer tax rate of .40 will remain in effect.
If you are a buyer, it may be too late now, but it always pays to consult an experienced real estate broker or real estate attorney to ensure that you will be able to retain the benefit of the pre-July 1st transfer tax rates. There may also be other investments, including real estate trust arrangements, to accomplish these tax savings.
- New Mansion Tax Rates
Effective July 1st 2019, Mansion tax rates will be adjusted to correlate to the sales generated from the property. These changes are in lieu of the current 1% tax on sales of $1 million or more.
What will happen to the wages of construction and state service workers?
The new legislation will increase the prevailing wages – state mandated minimum wages for skilled workers – of construction and service workers in the real estate industry.
What about green policies?
The National Association of Realtors wants to ensure that eco-friendly policies are applied to all residential and commercial real estate transactions – New York State trade publications are selling the idea of solar panels in real estate. These panels are to be measured by a sun number valued between 1 and 100. The sun values are measured by the individual size, pitch and orientation of every roof.
The average sun value of most New York State properties falls in the eighties and solar energy is promoted as an energy efficient strategy. State and local tax abatements will be offered to real estate consumers who use green energy sources. Additionally, solar panels increase the value of the properties.
Overall, it would be wise for every real estate investor and consumer to keep abreast of the ever-continuing changes in New York property laws as part of the city’s ever growing and increasingly competitive real estate market. Furthermore, investors and consumers should continue to research these green strategies to keep up with eco-friendly real estate market trends.