Excise Tax for Affordable Housing Begins in Santa Fe

Excise Tax for Affordable Housing Begins in Santa Fe

Excise Tax for Affordable Housing Begins in Santa Fe

SANTA FE, NM, October 30, 2025 - Following a landmark legal battle, the City of Santa Fe is implementing an ordinance requiring home buyers to pay a three percent excise tax on the sale amount over $1,000,000 for high-end residential properties. All the funds from this excise tax will go into the City's Affordable Housing Trust Fund. Santa Fe voters overwhelmingly supported this ballot measure in 2023 (73%), but on May 24, 2024 the First Judicial District Court granted an injunction that enjoined the ordinance and its resulting tax from taking effect. On October 27, 2025, the New Mexico Court of Appeals dissolved the injunction. The ordinance and the tax are in effect as of October 27, 2025, and the tax transactions closing on or after October 27, 2025 are subject to the tax.

Mayor Webber expressed enthusiasm for the positive impact this excise tax will have on affordable housing initiatives saying, "Winning in court is a major victory for everyone in Santa Fe. It clears the way for us to start collecting the excise tax on high-end homes and put that money to work to produce more affordable housing for the people of Santa Fe. It was a long legal fight, but it's worth it when it comes to the benefits for everyone in Santa Fe."

The City received public comments in 2024 on the proposed rule and forms to implement the tax ordinance. The rule provides the procedures for affected parties to comply with the ordinance and pay the tax.

The final rule and supporting documentation are available at santafenm.gov/finance-2/high-end-excise-tax. Questions can be directed to [email protected].

About the Affordable Housing Trust Fund

The City's Affordable Housing Trust Fund (AHTF) was established by ordinance in 2007, following a 2006 amendment to the New Mexico State Constitution that allowed public funds to be used to support affordable housing. The City's AHTF program was the first of its kind in New Mexico and one of the earliest across the US. The fund supports affordable housing activities to help residents live in Santa Fe. The New Mexico Affordable Housing Act governs the fund's uses. The City's Community Development Commission, a citizen advisory board, determines the annual spending priorities and provides funding recommendations for the Governing Body's approval.

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