Is the Santa Fe Luxury Home Tax Still Happening?

I was recently contacted by a luxury buyer who was concerned about the status of Santa Fe’s proposed luxury home tax. It reminded me that there may still be folks—buyers, sellers, even some agents—who think that tax is in place. So let’s set the record straight.

 The Backstory

In November 2023, Santa Fe voters approved what was commonly called the luxury home tax or mansion tax. The measure proposed a 3% excise tax on the portion of any home sale over $1 million, with the revenue intended to support the city’s Affordable Housing Trust Fund.

It was a bold move meant to address Santa Fe’s growing affordability crisis—but it didn’t take long before the measure was challenged in court.

 The Legal Challenge

Shortly after the vote, the Santa Fe Association of Realtors and a group of local property owners filed a lawsuit. Their argument was simple: the City of Santa Fe didn’t have the legal authority under New Mexico law to impose a tax on real estate sales.

The city countered by claiming it wasn’t a property tax, but rather a tax on the transfer of property—a service, not the asset itself.

But the First Judicial District Court didn’t buy it. In a firm ruling, the judge struck the tax down, finding that it exceeded the city’s powers and violated state limits on municipal taxation.

 The Bottom Line

There is no luxury home tax in effect in Santa Fe. The proposed 3% tax was ruled unlawful and is no longer a concern for buyers or sellers. If you've been holding off on a high-end purchase because of this issue—breathe easy. It’s off the table.

 What This Means for Buyers and Sellers

For buyers considering homes in the $1M+ range, this ruling removes a major cost concern. For sellers, it means fewer obstacles when marketing their property to luxury buyers.

In a market like Santa Fe—where the charm of adobe architecture meets world-class culture and natural beauty—clarity matters. And now, you can move forward with confidence.

 Have more questions about buying or selling in Santa Fe’s high-end market? I’d love to talk. Send me a message or book a call today.