New York lawmakers are considering a new tax on all-cash home purchases over $1 million as part of ongoing state budget negotiations tied to New York City’s growing fiscal pressures. According to reporting from Bloomberg, the proposal would impose a 1% levy on buyers purchasing homes in cash, with lawmakers also discussing whether to expand the measure beyond New York City to include suburban and upstate transactions. 

The proposed New York City tax is expected to raise roughly $160 million to help address the city’s budget shortfall. The discussions come as all-cash purchases have become increasingly common in the city’s housing market, driven in part by elevated mortgage rates and competitive bidding conditions. Data from the nonprofit Center for New York City Neighborhoods found that more than 60% of nearly 18,000 home transactions in New York City during the first half of 2025 were completed in cash. In Manhattan, nearly 90% of purchases above $3 million were cash transactions during that same period. 

Critics of the proposal have questioned whether the tax would generate the anticipated revenue. Jonathan Miller, director of markets at StreetEasy Matrix, told Bloomberg that buyers may simply restructure transactions to avoid the levy. “I continue to be amazed at how little these proposals anticipate the change in human behavior to avoid a new tax,” Miller said.