Posted by Leonard Steinberg on December 21st, 2013

As Mayor-elect BIll de Blasio and his fans decry the evils of the real estate market, I have to be certain that a recent Budget office report addressing the vast revenues generated by the real estate markets must be an eye-opener. Here are some interesting facts that clearly prove just how important a healthy, vibrant real estate market is, and just how much all these sales and purchases by the bad, bad rich people actually benefit all New Yorkers (without factoring in the huge economic activity):

• Transfer tax revenue is projected this year to jump to nearly $1.3 billion, or 17.6% over last year. Every time a property trades transfer taxes of around 1,825% is paid in taxes.
• Together with the mortgage recording tax and property taxes, real estate levies will represent nearly a third of the city’s total projected revenue in fiscal year 2014 and half of all the money the city gets from taxes, the Independent Budget Office said in a report released Thursday. The city’s fiscal year ends June 30.
• As property taxes rise with new assessment values, property tax revenue will reach $20.6 billion by the end of fiscal year 2015, a 4.1% increase over estimates for this year. That growth also includes a one-time cash infusion from retroactive changes to the coop and condo abatement program, which altered the eligibility requirements for the break and resulted in an extra $50 million for the city.
• The IBO predicts a steady increase in property tax revenue to the tune of 4.9% annually between 2015 and 2017, eventually reaching $22.6 billion. By contrast, the budget for the current fiscal year is around $70 billion.
• When the 2015 tentative assessment roll is released early next year, the office expects the total assessable value to creep up by 4.6%, with commercial properties leading the uptick.
• Revenue from transfer taxes, which include the real property transfer tax and the mortgage recording tax, are pegged at $2.1 billion by the end of the fiscal year, up sharply from the Great Recession’s nadir in 2010, when the city took in just $981 million. The robust growth was due in part to a series of high-profile transactions, including the $1.3 billion sale of 650 Madison Ave. in October, the highest-value taxable sale in the five boroughs since December 2010, the report stated.
• From 2015 to 2017, however, the IBO expects the double-digit growth rate in real property transfer taxes to slow to around 6.3%.
• Revenue from the mortgage transfer tax, slated to bring in $814 million by the end of this fiscal year, is projected to increase by 8.1% over the same period.

So while it is annoying for some when a Russian oligarch closes on a $50 million apartment, all of us New Yorkers should be celebrating the huge CHA-CHING of the New York tax register as it collects a good portion of that transaction to pay for the operations of our City.