Million dollar homes and taxes

Castles in the Sand

Three months ago, when I updated my quarterly million-dollar-and-over properties report in our area, I took some pity on wealthy real estate owners around the country who were experiencing a serious slow down in sales. Now I have another reason to empathize with the wealthy or near wealthy, particularly those who live in New York City.

On July 1 the city of New York, which encompasses not only Manhattan but four other New York City boroughs, all with high end properties, increased the so-called mansion tax. The tax escalated from a flat 1 percent for property sales $1 million or more to a progressive tax starting at 1.25 percent on homes between $2 million to $3 million up to a maximum of 3.9 percent on sales $25 million or more.

Technically, the buyers are responsible to pay the tax, but rest assured, it is a highly negotiable item, particularly in today’s slow high-end market.

Keep in mind the state of New York has had a 1 percent surcharge on all home sales over $1 million for many years. This tax stays the same for New York State homeowners, and only properties within the city of New York are subject to the progressive increase. This is in addition to New York State properties, especially within commuting distance to New York City, having some of the highest property taxes and state taxes in the country.

This combined with the cap on state and property tax deductions is the reason New York and other Northeastern states are shedding residents.

So, what does this mean to us low tax carefree Floridians? As I’ve previously stated, it probably means a steady influx of well-heeled buyers escaping high taxes and snow, a lethal combination. If they come to our area, here’s what they’ll find over $1 million based on the August, September and October sales and properties currently on the market as of this writing.

Cortez did not sell any $1 million or over properties this quarter, which is the same as the
previous quarter. The city of Anna Maria sold eight properties $1 million or over, ranging
from $1,000,000 to $1,925,000. Last quarter it closed 13 properties. The combined cities of Bradenton Beach and Holmes Beach closed eight properties over $1 million, ranging
from $1,025,600 to $3,550,000. Last quarter it closed 14 properties.

On the market as of this writing, in Cortez there are two over $1 million properties, residential land for $1,600,000 and a single-family home for $1,375,000. Last quarter
there were six available. The city of Anna Maria has 59 $1 million or over properties available – one listing at $5.5 million, four listed for $4 million or over, five listed at $3
million or over, 14 listed for $2 million or over and 35 listed for $1 million or over. Last quarter, Anna Maria had 48 properties available.

Finally, the combined cities of Bradenton Beach and Holmes Beach have 73 properties
available – two at $5 million or more, three at $4 million or more, two at $3 million or
more, 18 at $2 million or more and 48 at $1 million or more. Last quarter there were 69
available. The statistics for the analysis are compiled from the Manatee County Property
Appraisers Office and available properties from realtor.com.

Although the million-dollar and over sales are down a little and the available properties
are up a little, considering the months analyzed, it’s expected. Everyone is getting ready now for the busy winter season listing their properties and waiting for the Northeast escapees to arrive.

Florida still has the best weather and lowest taxes in the country, and the high-end buyers especially are starting to take notice.

Let’s make sure Florida never has a mansion tax.