HGAR Leads Opposition to Implementing City of Mount Vernon Law to Increase Real Estate Transfer Taxes
REALTOR® Group Argues Tax Hike May Shut Out Many Potential Home Buyers, Particularly African Americans
White Plains, NY (May 2024) The Hudson Gateway Association of REALTORS®, (HGAR) Inc. is taking a stand against the City of Mount Vernon’s new law, which will increase the real estate transfer tax on sold properties from one to one-and-a-half percent when implemented later this year. The new tax will be imposed on the sale of properties in excess of $50,000, formerly $100,000.
With the median sales price for a single-family home in the City of Mount Vernon at $627,550 as of April, a one-and-a-half percent transfer tax translates to $9,413.25. This amount could be passed onto home buyers, should the seller decide not to cover that cost, or it may be added to the price of the home. “This legislation authorizes the City of Mount Vernon to increase the transfer tax without a voter referendum,” said Rey Hollingsworth, Secretary of the HGAR Board of Directors and Broker/Owner of Hollingsworth Real Estate Group in White Plains. “Other transfer tax proposals, particularly those tied to community preservation funds, at least give the locality’s residents the opportunity to vote in favor of or against the tax.”
HGAR, along with many New York REALTORS®, generally oppose real estate transfer taxes at all levels of government. “These taxes make home-buying less affordable, thus taking away from working families and individuals the many benefits of homeownership,” added Hollingsworth. “ This would also exacerbate the dreams of African American buyers, which comprise approximately 80% of buyers in Mount Vernon.”
The current homeownership rate for African Americans in New York State is 34%, which is lower than the 44% homeownership rate for African Americans in 1968 when the Fair Housing Act was passed. “This community is in a housing crisis. Mount Vernon’s transfer tax increase adds to the crisis, instead of working to resolve it,” he said.
Hollingsworth contends that transfer taxes also make cities less competitive with other cities by raising the cost of buying real estate for both residential and commercial properties. “Local governments should be considering legislation that promotes tax equity, homeownership, and economic development, rather than further aggravating the problem by imposing even more taxes,” he added.
According to the Federal Reserve’s most recent survey of consumer finances, the median savings account balance for all American families was $8,000 in 2022. Using an example of a $500,000 Mount Vernon home, a down payment of just 10% would equal $50,000, plus an additional $7,500 to cover the transfer tax. This amount is in addition to buyer closing costs, which typically range from 3 to 6 percent of the loan, according to Rocket Mortgage. For this example, a loan of $450,000 could carry closing costs of $13,500 to $27,000.
As a result of what HGAR considers to be prohibitive costs for potential local buyers, the Association is urging Mount Vernon’s City Council to repeal Local Law 4, passed at the end of 2023. Hollingsworth plans to address the Council at a meeting later this month.
The Hudson Gateway Association of REALTORS® is a not-for-profit trade association consisting of over 13,000 real estate professionals doing business in Manhattan, the Bronx, Westchester, Putnam, Rockland, and Orange counties. It is the second largest REALTOR® Association in New York and one of the largest in the country.
