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August 9, 2006
Skirting Mansion tax?
Here's a question: if you are going to buy a place for say $1,020,000, is it possible to pay the $20,001 that you are over the million mark to the seller separately, so that the purchase price can be declared $999,999, thereby skipping the mansion tax? Just a thought...
Comments
sure, if the seller and the agent - who will lose some of his cut - agrees. Just don't tell anyone.
Posted by: Anonymous at August 9, 2006 1:23 PM
Sure if you want to break the law
Posted by: Anonymous at August 9, 2006 1:45 PM
That's why I was asking about the ethicacy of it.
Posted by: Anonymous at August 9, 2006 2:05 PM
it's not ethical but there are many sellers who are willing to do this to guarantee a sale. Not a big deal, in my opinion.
Posted by: NorthSloper at August 9, 2006 2:26 PM
not ethical, and illegal. If the city finds out, they'll try to collect and you would be subject to fines, if not worse, since this would amount to tax evasion. I think the mansion tax threshold is too low (don't like the idea in any event - think it is unfair really - but would not feel comfortable doing what you are proposing.
I've heard of people paying for the house and separately buying furniture and non-fixtures in the house for the balance above the $1million threshhold. Again, dodgy, and could get you into hot water.
Posted by: 1847 at August 9, 2006 4:35 PM
Thanks 1847. I completely agree (I'm the poster). The mansion tax is rather unfair, especially these days when you are hard-pressed to find a brownstone/townhouse under 1M. They should raise it to 1.5 or so. We can dream...
Posted by: Anonymous at August 9, 2006 4:43 PM
You wish to break the law because you think it is unfair? What are you, twelve years old?
Posted by: Anonymous at August 9, 2006 8:36 PM
The last I heard, if a dwelling has 3 or more units, you don't have to pay a mansion tax. Its only for condos, co-ops and one/two family homes.
Posted by: Anonymous at August 10, 2006 5:52 AM
Just to clarify the last post, that is not true. It applies to 3 family brownstones. I also had that fleeting brilliant idea and I was immediately shut down by my accountant, lawyer, mortgage broker from even approaching the seller -- it was just an idea but it is tax evasion and you are playing with fire. I agree with everyone that the purpose of the mansion tax is to tax mansions - for the purpose it was designed, the tax should be hiked to much higher levels, considering what you can get in brownstone brooklyn for a million dollars, we are not talking about lolling around in a luxurious mansion. Good luck to you.
Posted by: donatella at August 10, 2006 10:06 AM
The Mansion tax should not be an arbitrary dollar amount but a certain percentage above the average price for a house in that area.
Because if you plunk down one million dollars in some place, you could get acres of land, a pool, and a huge house. But in some other places you get a building (with almost zero yard) that you have to gut reno just to live in it.
That said, the Mansion tax is unfair, but I can't advocate trying to find ways to evade it. Remember that they nailed Al Capone for tax evasion, not for murder (or any of his other crimes).
Posted by: Arsenic and Old Lace at August 10, 2006 3:07 PM
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