Santa Fe is considering adopting a “mansion tax,” or an extra tax on homebuyers of houses over $1 million. The would go to the city’s Affordable Housing Trust Fund, which supports new housing projects and efforts to keep residents in their homes.
The proposal would impose a 3% tax on the amount a buyer pays over $1 million. So, if a home costs $1.1 million, the buyer would pay $3,000.
City Councilors Jamie Cassutt and Renee Villarreal sponsored the bill, which was introduced Wednesday night at a Quality of Life Committee meeting. Cassutt said it would create a permanent and dedicated funding stream.
“There has been this negative impact as we've gotten an influx of people coming in, [and] as home prices have risen, and that is that we are losing our local population. We're losing our workers. This is impacting the tourism industry. This is impacting Healthcare. This is impacting education,” she said.
The city estimates that the tax will bring in about $4.5 million per year. The Affordable Housing Trust Fund currently receives $3 million per year from the general fund. Cassutt said the city could decide to put the money from the general fund towards other uses if this bill passes.
Sales of homes in Santa Fe over one million dollars doubled during the pandemic, but home sales overall have slowed down in the last year, according to Sotheby’s Santa Fe. At the same time, arecent study from the Harvard Joint Center for Housing Studies showed that about half of renters in Santa Fe put more than 30% of their income towards rent.
Public comment on the proposal is scheduled for July 12th, and it’ll be up for a final vote on August 9th. If it passes, it’ll be on the ballot in November.
You can submit public comment at thecity’s website.
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