REBNY report outlines contributions from real estate industry to New York City’s tax base and economy

The Real Estate Board of New York (REBNY), the City’s leading real estate trade association, released its latest “Invisible Engine” report, which highlights the critical role the real estate sector plays in generating tax revenues and jobs. The largest source of locally gathered tax collections for the City of New York, Real Estate Related Taxes (RERT) have provided a consistent level of funding to a wide range of vital government services and are expected to only continue to grow in the future. The report released provides totals on RERT in 2024, 2025 projections and updates to historical averages on RERT, in addition to breaking down these revenues by property type and comparing collections to revenues needed for specific City budget items. 

“Through the pandemic, changing workplace trends and volatile macroeconomic pressures on sales and development activity, the real estate sector continues to be the backbone of New York City’s economy and revenue base,” said REBNY president James Whelan. “Without the consistent job and revenue creation from real estate, New York City’s finances would be in dire conditions. Industry and government leaders must continue to work hand-in-hand to plan an agile, prosperous and equitable future for our City.” 

For the City of New York, RERT include collections from real property tax assessments, the Real Property Transfer Tax, the Mansion Tax and other revenue sources. Real estate taxes also provide critical support for the Metropolitan Transportation Authority’s operating and capital budgets. 

Key findings from the report include: 

• RERT totaled a record high of approximately $37 billion in 2024. RERT are projected to exceed $40 billion in Fiscal Year 2025. 
• New York City’s budget ($110 billion) has spiked by 89% since 2010. Revenue from RERT doubled from $18 billion to $37 billion during the same period. 
• Real estate and construction sectors employ nearly 300,000 people, approximately 6% of the City’s 4.8 million workers. The industries provide pathways to the middle class for many without a college degree. With overall housing construction near its lowest levels in recent years and a glut of underutilized Class B and C office space, construction jobs have slipped to their lowest level since 2016.
• RERT have consistently been the largest source of New York City tax revenue, accounting for an average of 51% annually in locally gathered taxes and $429 billion dollars since 2010. Despite record totals last year, RERT as a share of locally gathered tax revenues came just under 50% for the first time since 2019 due to higher-than-expected income tax and contributions to the pass-through-entity-tax. RERT are projected to again exceed 50% in 2025. 
• Despite challenges to the office market since the disruption of the COVID-19 pandemic, commercial property remains the largest contributor to RERT. The $13.1 billion in revenue from commercial property alone in 2024 is enough to cover the operating budgets for several city agencies combined, including the Department of Transportation, Department of Environmental Protection and the NYPD. 
• Separate from RERT, fees and fines collected by the City from the real estate industry totaled over $650 million in 2024. These collections are enough to cover the operation of the entire New York City public library system with much to spare, or the Department of Parks and Recreation’s annual budget.

Real estate professionals and stakeholders have worked hard to sustain momentum in transaction activity and new development in the face of unprecedented challenges in recent years. This includes the COVID-19 pandemic, rising interest rates, elevated construction costs, the expiration and absence of key tax incentives to spur new development and a time consuming and increasingly contentious land use process. The hard work of industry professionals in the face of these challenges has resulted in vital revenues for the City.