The Shape of the Tax: Transaction Shifting at New York City's 2019 Transfer-Tax Notches and the Mortgage Recording Tax

New York's 2019 budget created seven buyer-paid transfer-tax notches on one date, from USD 2 million to USD 25 million, and left the USD 1 million mansion-tax notch unchanged. The paper compares sale prices at the same thresholds before and after the reform, with the USD 1 million threshold as a control. At each new threshold with enough sales to measure, sales moved to just below it. The shift is larger than at any of sixteen never-taxed round prices below USD 6 million, and a year-by-year event study shows it starting with the reform. It appears in houses and condominiums and does not come from foreclosure transfers. The shift remains evident without company sellers; among company-seller sales, a proxy that includes sponsor sales whose prices developers set in advance, it is clear only at USD 3 million. At USD 2 million and USD 3 million, the range of prices emptied above the threshold is two to three times as wide as the tax jump. The response does not grow in proportion to the buyer's rate increase: the sampling bootstrap rejects proportionality, and comparisons with placebo noise point the same way more weakly. Equal responses are not established either. If the extra sales below each threshold came from above it, the avoided tax is USD 2–3 million a year, 2–3% of the revenue the reform's schedule implies between USD 2 million and USD 6 million. The paper then applies these results to New York City's mortgage recording tax, which charges borrowers 1.80–1.925% of the loan and charges a purchase without a mortgage nothing. Applied to the recorded principal of 172,725 observed loans, the schedule implies a gross charge that averages 1.41% of price for houses and 1.28% for condominiums, before credits, exemptions and consolidation adjustments. With transactions held fixed, the gross schedule-implied charge is about USD 244 million a year on residential purchase money between USD 300,000 and USD 6 million in four boroughs, and the paper costs continuous schedules that would raise the same static amount. The paper identifies neither economic incidence nor an optimal tax. Version 2.6 makes six wording changes after a final cross-check, with no change to any estimate. The recording-tax figures are labelled as gross schedule-implied charges. The financing flag is described as a matched mortgage instrument. Company-seller groups replace the claim that most of the response comes from resales. The avoided-tax figure is conditional on relocation across thresholds. Inference wording is made descriptive where the tests do not support more. Replication package version 1.9 reproduces this version. Version 2.5 corrected the placebo inference. Size-matched placebo draws are now taken with replacement; version 2.4 drew them without replacement, so they varied less than repeated samples would. The main results are unchanged. Placebo ranks and tail shares are now described as reference comparisons, not exact tests. The recording-tax table's condominium row now uses the 47,702 loans of the public linked dataset, with the same statistics as before, so the replication package reproduces it. Replication package version 1.8 reproduced it. See revision_notes.md for details.