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Could rising taxes lead London homebuyers to New York City?

3 Aug 2012 2:15 PM
Could rising taxes lead London homebuyers to New York City?

The U.S. housing market has displayed recent overall growth, showing signs of recovery from the economic downturn of the late 2000s, as seen in reports such as the National Association of Home Builders' Improving Markets Index for August. However, according to a recent piece in The New York Times, the most-populated metro in the United States might see more international homebuyers in the near future as a result of a non-domestic issue - rising property taxes in London. 

International property consulting firm Knight Frank examined the price difference between those who purchase homes in London and New York in a recent study. The company found that London homebuyers might pay twice as much in transactional taxes than those buying property in New York. In fact, the news outlet notes that London ranks as number eight in terms of highest total purchase costs beyond the sales price of properties, while New York is number 12 on the list.

New York currently levies a "mansion tax" on property buyers who purchase mansions or luxury homes for $1 million or more. However, it remains to be seen if New York City will keep its current taxes intact.

"Given the prominence of real estate in the past decade," Lawrence White, an economics professor at New York University’s Stern School of Business, said to the news source, "I am a little surprised we haven't seen more political pressure to tax high-end transactions."