New York, NY (May 23, 2026)

A proposed tax on all-cash real estate purchases over $1 million in New York City is expected to be removed from the state budget, easing concerns from buyers, sellers, and the real estate industry.

The proposal would have added a 1% charge on qualifying home purchases made without financing. Lawmakers had considered the measure as one way to raise revenue for New York City as officials work to close a significant budget gap. But amid budget negotiations in Albany, the plan now appears likely to be left out of the final agreement.

The all-cash tax was aimed at wealthier buyers who can purchase property without relying on a mortgage. Supporters argued that the measure could generate new revenue from higher-end transactions while addressing an increasingly uneven housing market. Critics said the tax would create new complications, discourage deals, burden sellers indirectly, and include loopholes that could weaken its impact.

All-cash purchases have become a major force in New York City’s housing market, especially as high mortgage rates have made financing more expensive. Cash offers are often more attractive to sellers because they can close more quickly and carry less risk of falling apart during the mortgage approval process. A recent housing analysis found that all-cash deals made up more than 60% of home sales in the city during the first half of 2025.

While the cash-purchase tax is expected to fall away, state officials are still moving forward with a separate pied-à-terre tax targeting expensive second homes. That proposal would apply to New York City properties valued at more than $5 million and is expected to affect roughly 10,000 homes. Officials estimate it could raise at least $500 million annually for the city.

The debate reflects the broader challenge facing city and state leaders as they search for revenue without raising income or corporate taxes. For now, the likely removal of the all-cash purchase tax marks a win for the real estate sector, while the fight over luxury housing taxes continues in Albany.