New York proposes 1% tax on million-dollar cash home purchases

Lawmakers in New York are considering a 1% levy on residential purchases above $1 million that are made without a mortgage. The proposal, part of broader budget negotiations that also target luxury second homes, seeks to level the tax burden between financed buyers—who already pay a mortgage recording tax—and cash buyers who currently avoid it.

If enacted, the tax could encourage affluent buyers to obtain strategic financing, boosting demand for jumbo and portfolio mortgage products. Mortgage professionals anticipate opportunities to structure low‑LTV or short‑duration loans for high‑net‑worth clients who traditionally bypassed financing. Critics argue that sophisticated buyers may simply add minimal financing to sidestep the surcharge, limiting the measure’s effectiveness, though it may set a precedent for similar policies in other high‑cost markets.