Updated October 2026
Buying a higher-priced home in Santa Fe? There may be an additional tax to include in your budget.
Santa Fe’s High-End Excise Tax for Affordable Housing—often called the “mansion tax”—applies to qualifying residential property purchases within city limits. As of May 1, 2026, the tax is 3% of the amount above $1,029,000, rather than 3% of the entire purchase price.
As a Santa Fe native and local broker, I want buyers to understand this cost before making an offer. A little planning early in the process can prevent an unwelcome surprise at closing.
How the Tax Works
For a typical taxable home purchase, the calculation is straightforward: subtract the current threshold from the purchase price, then multiply the remaining amount by 3%.
| Purchase price | Amount above $1,029,000 | Excise tax |
|---|---|---|
| $1,000,000 | $0 | $0 |
| $1,100,000 | $71,000 | $2,130 |
| $1,500,000 | $471,000 | $14,130 |
| $2,000,000 | $971,000 | $29,130 |
These examples assume an ordinary taxable residential sale, with the purchase price representing the total consideration paid for the property. Unusual transfers may need additional review under the ordinance’s definition of “consideration.”
A purchase at or below the threshold does not generate the tax, but the City’s current administrative rule still requires purchasers of real property within city limits to file the High-End Excise Tax Report and Payment Voucher.
Your title company can confirm the paperwork required for your particular transaction.
Who Pays, and When?
The purchaser is responsible for the tax.
Under the City’s current administrative rules, the High-End Excise Tax Report and Payment Voucher—and any tax due—must be submitted to the City within 30 days of the property transfer.
When a title insurance professional handles the transfer, the rules call for that professional to collect the completed form and tax due from the purchaser, verify the required information, and handle the submission.
For buyers, the practical approach is to plan for this expense as part of the closing budget rather than treating the 30-day filing window as extra time to come up with the funds.
If the title company does not collect the form and payment, the purchaser remains responsible for compliance.
The form generally requires notarization. However, the City’s administrative rules permit an alternative identity-verification process in certain remote-closing situations. Your title company can determine whether that exception applies.
If you are considering seller concessions or other negotiated contributions toward closing costs, discuss them with your broker, lender, and title company before relying on them in your budget. The City’s rules include the value of concessions in the calculation of total consideration, so the structure of a concession can matter.
The purchaser remains responsible for compliance with the tax ordinance.
City Limits Matter More Than the Mailing Address
This is a City of Santa Fe tax. It does not apply in the same way to property located in unincorporated Santa Fe County.
A Santa Fe mailing address alone does not establish that a home is inside city limits. Before estimating the tax, verify the property’s actual jurisdiction with the title company or City.
This matters when comparing homes in different parts of the Santa Fe area. Two properties with the same purchase price can have different transaction costs depending on their location.
Neighborhood names and ZIP codes alone are not enough to make that determination.
Of course, the tax is only one part of choosing a home. Location, condition, utilities, neighborhood character, and your lifestyle still deserve careful consideration.
My role is to help you understand the whole picture so you can make a decision that fits your needs and budget.
The Threshold Changes Annually
The original threshold was $1 million. Effective May 1, 2026, the City raised it to $1,029,000, reflecting a 2.9% adjustment based on the applicable Consumer Price Index for 2025.
The ordinance provides for annual adjustments each May 1 using the previous calendar year’s increase in the applicable Consumer Price Index. If the index does not increase, the threshold remains unchanged.
If your purchase is scheduled near May 1, confirm the threshold that applies on the transfer date. An estimate prepared while you are shopping may need to be updated before closing.
For current figures and forms, use the City of Santa Fe’s High-End Excise Tax page.
Are There Exemptions?
Yes.
The ordinance lists specific exempt transfers, including commercial property, undeveloped land, certain government and charitable transactions, transfers by inheritance, and some gifts and family transfers.
These categories have conditions.
For example, a family-transfer exemption does not mean every sale between relatives is exempt. Likewise, an inherited transfer of title and a later sale of that inherited home are different transactions.
Before relying on an exemption, have the title company or a qualified real estate attorney review the circumstances and required documentation.
A transaction may owe no tax and still have a City filing requirement.
Why Santa Fe Adopted the Tax
Santa Fe voters approved the measure in November 2023 with approximately 73% support.
A court injunction initially prevented implementation. On October 27, 2025, the New Mexico Court of Appeals dissolved that injunction, and the City began applying the tax to qualifying transactions closing on or after that date.
Revenue from the tax is dedicated to the City’s Affordable Housing Trust Fund, which supports affordable-housing efforts including development, preservation, and assistance programs.
For buyers, the important point is that the tax is currently in effect and should be included in your planning when it applies.
What to Confirm Before Making an Offer
Before committing to a higher-priced Santa Fe home, work with your broker and title company to confirm:
- whether the property is within City of Santa Fe limits;
- the threshold applicable to your expected transfer date;
- the estimated tax based on the transaction’s total consideration;
- whether an exemption applies and how it must be documented;
- whether any proposed concessions affect the calculation;
- who will prepare the report, collect payment, and submit everything to the City.
This information helps you compare properties and understand your total cash needs before closing.
Buying in Santa Fe With Confidence
Santa Fe’s mansion tax is one more detail to understand when purchasing a home here. Knowing how it applies allows you to plan for the cost while keeping your focus on finding the right property.
Having grown up in Santa Fe, I love helping buyers discover the neighborhoods and homes that make this community special. I also believe in clear, honest guidance about the practical side of buying—from the offer through closing.
If you are considering a Santa Fe purchase, contact Lori Montoya at 505-577-8750 or visit SantaFeWithLori.com.
I would be happy to help you explore your options and prepare for your next move.