New York tax revenues have seen a 38% drop in real estate investment


Mayor Bill de Blasio and Governor Andrew Cuomo (Getty; iStock)

Mayor Bill de Blasio and Governor Andrew Cuomo (Getty; iStock)

Investment sales in the city ended the year with a decline.

Sales in December fell 51 percent from a year earlier to $ 2 billion, although transactions fell by a more modest 7 percent, according to a new report from the New York Real Estate Council.

During the year, the dollar fell 48 percent to $ 21.4 billion and transactions fell 20 percent to 2,579 trades.

Apartments for sale did better last month. Sales fell by only 10 percent from December 2019, ending the year at $ 25.7 billion, down 43 percent. In fact, transactions increased by 2 percent month-on-month, ending the year by 41 percent.

When the dust was destroyed in a pandemic year, the decline in tax revenues from two types of real estate transactions was significant: 38 percent for the city and 32 percent for the state. In dollar terms, the decline for the calendar year was city tax revenues of $ 1.2 billion and government revenues of $ 368 million.

For a state with a budget of around $ 180 billion, the decline is a real rounding mistake. But $ 1.2 billion is about 1.3 percent of the city’s annual budget.

Real estate tax revenues are responsible for 53 percent of the city’s operating budget. That’s more than double the next closest contributor – 21 percent personal income tax.

Last year, property taxes generated $ 31.9 billion for the operating budget. Property taxes, the collection of which was relatively stable last year, bring in much more money than transfer taxes. However, the valuation of commercial real estate has since fallen due to a pandemic, and in fiscal year 2022, which begins in July, it will result in lower property tax bills.

“With this full range of real estate activities in 2020, we can fully see the devastating economic impact of the Covid pandemic on New York,” REBNY President James Whelan said in a statement. “Our city and state urgently need a new federal administration to intervene with the stimulus package – including state and local support, rent relief and unemployment benefits.”

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