NYC’s Tax Revenue Exceeds Pre-Pandemic Level as Real Estate Sales Boom

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Tax revenue coming from New York City’s real estate deals has exceeded even pre-pandemic levels as demand for residential properties in the five boroughs rises.

The city’s tax revenue more than doubled, to $468 million, in July and August, the first two months of the 2022 fiscal year, according to a report based on recorded sales from New York City Comptroller Scott Stringer. That represents 18 percent more funds than in the same period prior to the pandemic in 2019, Bloomberg first reported. 

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The revenue increases are partially due to the rich flocking back to Manhattan and snatching up pricey condominium units, co-ops and townhouses. Sales of those bougie apartments priced at $4 million and above reached more than $11.4 billion through the end of September, greater than any yearly total since 2006, Commercial Observer reported.

The uptick in tax revenue is a sign that the city’s residential market as a whole is recovering, too, even as commercial real estate continues to suffer. Condo, co-op and house sales at any price point reached $41 billion in the first eight months of 2021, 76 percent higher than in 2020, according to the comptroller’s report.

However, commercial real estate sales — including multifamily rental properties and commercial buildings — are still well below pre-pandemic levels. Both totaled $12.5 billion in sales in the first eight months of 2021, 50 percent below the same period in 2019. The report notes that its sale calculation is missing Google’s massive $2.1 billion purchase of St. John’s Terminal last month.

Tax revenue from residential real estate sales and mortgages has recovered strongly, Stringer found. More apartments sold in Manhattan in the third quarter of this year than at any other time in the last three decades, numbering at 4,523 closed sales of co-ops and condos, The New York Times reported. And sales volume topped out at $9.5 billion, the most in any recorded quarter. 

After residents fled out of fears of the coronavirus last fall, that comeback is a significant turnaround.

Celia Young can be reached at cyoung@commercialobserver.com.