According to the City of Santa Fe's High-End Excise Tax Report and Payment Voucher, a buyer who closes on a $1.5 million home inside Santa Fe city limits this fall owes the City $14,130. It has to be paid within 30 days of the transfer documents and before the deed can be recorded. A buyer who pays the same price for a home with a Santa Fe mailing address on unincorporated county land owes the City nothing. Both listings can show the same price, the same town name and the same ZIP code on the portals.
The City's Finance Department says the High-End Excise Tax for Affordable Housing has applied to qualifying closings since October 27, 2025. That was the day the New Mexico Court of Appeals dissolved the injunction that had blocked it since May 2024. Santa Fe voters approved the measure in 2023 with 73% support. Almost a year in, the price tag on a listing still tells you less about this tax than three other details do: where the parcel sits, which year's threshold applies, and what the contract counts as part of the price.
The Buyer Pays, Even Though One City Page Says the Seller Does
Under the ordinance, the purchaser owes the tax when the property transfers. The City's administrative rule and its Finance Department page say the same thing.
The City's Office of Affordable Housing page still says the seller pays at closing. It also works its example from the original $1 million threshold. For legal mechanics, the ordinance and the Finance Department's current page govern. Anyone forwarding a link to a client or relative should send the Finance page.
The cost lands on the buyer, but sellers feel it too. On a home priced above the threshold, the buyer's cash to close goes up by the amount of the tax. That money is separate from the down payment and the lender's fees, and it comes due right as the transaction finishes.
The Threshold Moved on May 1 and Will Move Again
The tax is 3% of the price above a set amount, not 3% of the whole price. That amount is indexed to inflation. From the start of collections through April 30, 2026, the first $1,000,000 of any purchase was untaxed. On May 1, 2026, the City raised the threshold by 2.9%, matching the 2025 consumer price index, to $1,029,000. It adjusts again every May 1 unless the index doesn't rise.
Here is what that change means at a few price points. The $1.5 million row matches the City's own worked example on its payment voucher.
| Purchase price | Tax under $1,000,000 threshold, through April 30, 2026 | Tax under $1,029,000 threshold, from May 1, 2026 |
|---|---|---|
| $1,029,000 | $870 | $0 |
| $1,100,000 | $3,000 | $2,130 |
| $1,250,000 | $7,500 | $6,630 |
| $1,500,000 | $15,000 | $14,130 |
The gap is $870 at every price above the new threshold, which is 3% of the $29,000 increase. It's a modest number. It also shows that the band of homes owing no tax at all widens a little each spring. A home that would have owed a few hundred dollars last winter can owe nothing at the same price today. Formulas copied from a 2025 spreadsheet will be wrong.
The voucher's own sample transaction shows how easily dates and thresholds get mixed up. It applies the $1,029,000 figure to a transfer dated June 30, 2024, a date that falls under the old $1,000,000 rule.
Concessions Count as Part of the Price
This detail matters most for a deal priced near the threshold. The City's administrative rule defines a concession this way:
"a benefit or discount provided by the buyer or seller as part of a property transfer transaction. Examples include payment of the other party's tax lien or realtor commission, covering the costs of new appliances, or providing an allowance for repairs to the property."
The rule then says, "The value of concessions shall be included in the calculation of total consideration." Consideration is the figure the 3% applies to.
That language matters in negotiations that end in credits. An inspection report on an older adobe can lead to a repair allowance. A seller can agree to cover the buyer's agent's commission. Each of those is a concession the rule names, and the rule puts its value into consideration. So a contract price written just under $1,029,000 may not be the number the tax is figured from once credits are added.
The rule doesn't say exactly how each kind of credit gets valued or added. Before relying on a figure just under the threshold, both sides should ask the title company and the City's excise tax office at [email protected] how the concessions in their contract will be treated.
A Santa Fe Address Doesn't Put a Home Inside the City
The tax applies only to "conveyances of real property located within the geographical boundaries of the City." That's the legal city limits, not the mailing address and not the county. Coverage of the tax in The Santa Fe New Mexican describes it the same way, as a fee on home sales "within city limits." Plenty of homes marketed as Santa Fe sit on unincorporated Santa Fe County land, outside the ordinance.
Some parcels straddle the line. In that case the rule taxes only the part of the price "fairly attributable to the portion of the property located within the City." A larger lot at the edge of town could end up with a split calculation. The rule doesn't spell out a formula for doing the split.
The City hasn't published an address-lookup tool for the tax. These public maps can answer the question:
- City of Santa Fe Public Viewer. The City's map viewer has City Limits, Parcels and Physical Address Points layers, so you can lay a parcel's outline over the municipal boundary.
- Santa Fe County Public Map Portal. The County's Tax Parcel Viewer shows assessor tax-parcel data.
- People, for edge cases. The City says its map data isn't guaranteed accurate or complete. If a parcel sits close to the line, call City GIS at 505-955-6490 or email [email protected], and ask the excise tax office for a determination specific to the tax.
The 30-Day Clock Runs Alongside Recording
Once jurisdiction and price are settled, the City's rules set the order of the paperwork:
- Confirm the parcel is inside city limits and check whether any exemption applies. The rule exempts permanently affordable housing, transfers to or from government, qualifying charitable or religious grantees, gifts, inheritances, and certain family transfers of a principal residence. Commercial property, undeveloped land, and multifamily buildings of 16 or more units on one lot under one owner are excluded. For mixed-use property, only the residential portion is taxed.
- Calculate from total consideration, with concessions included and using the threshold in effect.
- Complete the High-End Excise Tax Report and Payment Voucher. It asks for the title insurance agency and agent when there is one.
- Pay by wire with the property address in the wire details. Payment, or a documented exemption, is due within 30 calendar days and before the deed is recorded.
The rule says that when a title insurance agent handles the transfer, the agent collects the buyer's payment and completed form. Buyers working with a title company should expect the payment request to come from there.
The Questions No City Document Answers Yet
Some practical questions aren't covered by any City source we reviewed. Raise them early with your lender and title company, not at the closing table:
- Whether the tax can be rolled into a mortgage or has to come in as cash.
- How it should appear on the Closing Disclosure.
- Which threshold applies to a contract signed before May 1 that closes after it. The rule ties thresholds to dates but doesn't address this case directly.
The legal story is also still open. The appeals court ruled that the Santa Fe Association of Realtors and two individual Realtors lacked standing to sue. It didn't rule on whether the tax is lawful. The New Mexico Supreme Court then declined to review that decision, as KUNM reported in January 2026.
A second case comes from a buyer. In its first month, the City received three payments totaling almost $59,000. One of the payments came from someone who was finishing a home purchase when the tax took effect. The buyer sued in state District Court on December 5, asking for the payment back. The City filed a motion to dismiss on January 8, and news coverage in January reported no ruling yet.
The City's adopted budget for fiscal year 2027 goes further. It lists among the City Attorney's Office accomplishments "prevailing on a second challenge to the High-End Tax." It also names continued defense of the tax and "any accompanying appeals" as a goal for the coming year.
The same budget projects $1.5 million in excise tax collections for the Affordable Housing Trust Fund. That figure is a projection, not a reported total. A footnote says that "due to ongoing legal challenges," the City is collecting the money and holding it unspent until further notice. We found no published total of what has actually been collected since the first month, so ask the City for the current status before treating the legal question as closed.
Quick Answers
Does the tax apply to a vacant lot inside city limits? No. Undeveloped land is excluded, along with commercial property.
Is an inherited home subject to the tax? Inheritances and gifts are on the rule's exemption list. Even so, an exemption has to be documented within the same 30-day window.
Will the threshold be $1,029,000 next year? Probably not. The threshold resets each May 1 using the prior year's western-region consumer price index for urban workers. It stays the same only if that index doesn't rise.
This post is general information, not tax or legal advice. Sellers pricing a Santa Fe home near the threshold and buyers comparing homes on either side of the city line can talk through jurisdiction, concessions and timing with Jessica Hoffer before the contract is written. If you're thinking about listing, start with Get Your Instant Home Valuation to see where your home's likely price falls relative to $1,029,000.
