After years of saving for a down payment, Hamza Sheikh was ready in 2022 to buy his first home—a one-bedroom apartment in Manhattan.
Sheikh, who is in his early 30s and works in technology, was “dead set” on paying less than $1 million, according to his real-estate agent, Phillip Salem of Compass. That’s because New York charges a so-called mansion tax for properties of $1 million or more, meaning he would have to pay an additional 1%, or at least $10,000, in cash at closing.
“It wouldn’t have been a total deal breaker,” says Sheikh, who likely would have borrowed the extra cash from his family. But avoiding the tax “made the whole process a lot more feasible.”
They focused on apartments priced around $1.1 million, seeking sellers who might be willing to go below $1 million, Salem said. Eventually, they found a Chelsea condo asking $1 million; Salem negotiated the price down to $995,000, and they made a deal.
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