Legislators support 'pied-à-terre' tax on multi-million dollar second homes

A project to tax the rich in multi-million dollar second homes in New York quickly came closer to reality, with legislative leaders in Albany and Governor Andrew M. Cuomo having all endorsed the law. 39; idea funding for the besieged metro network in the city.

Mr Cuomo said Monday that there was a consensus among state leaders, all Democrats, that a so-called pied-à-terre tax was a good idea, calling it the "only new money agreed" for a state facing a significant drop in tax revenues.

The purchase of a $ 238 million apartment in Central Park South by Kenneth C. Griffin, a billionaire hedge fund with an estimated net worth of $ 10 billion, may have helped make the legislation more feasible said the promoters.

"I think we have a transit system in crisis, social housing collapsing around its residents and a gaping gap between the very rich and the ordinary New Yorkers who are driving this conversation," he said. Senator Brad Hoylman, godfather of the pied-à-terre of his room.

Under the Senate bill, a pied-à-terre tax would institute an annual tax of $ 5 million or more on homes and would apply to homes that do not serve as their principal residence. ;Buyer.

It was not clear right away how much money the tax was going to generate; The City Comptroller's Office, Scott M. Stringer, estimated that a tax on the pied-à-terre would bring in at least $ 650 million a year if it were passed today. And based on expected earnings, Cuomo estimated that the state could then raise $ 9 billion in bonds, backed by taxes expected from landowners.

The Senate and the State Assembly had to include a version of the tax in the budget proposals that should be published this week, although the exact details remain to be clarified. And given the often tumultuous process of negotiating the state budget, which must be completed on April 1, it is possible that the tax will not be approved this year.

But according to Senate leaders, the tax should have been paid for a long time.

"It's great that with a united democratic legislature and the support of the governor, we can finally do it," said Mike Murphy, spokesman for the Democratic majority in the Senate, adding that a Taxing on "Second Ultimate Owners in New York City, it's common sense and something we've been supporting for years."

"If we had adopted marijuana, we would not have needed to replace the pied-à-terre," Cuomo told reporters in Albany. "It's a very tight box this year."

Hoylman said many pressing needs could use an influx of recurring funds, and was indifferent to placing money in a revenue stream dedicated to an organization such as the Metropolitan Transportation Authority.

His bill would create a sliding tax surcharge. For properties valued between $ 5 million and $ 6 million, a surtax of 0.5% would be added to the value above $ 5 million. Fees and a higher supplement would apply to homes sold for more than $ 6 million, plus $ 370,000 and a 4% supplement for homes over $ 25 million. .

Corey Johnson, the chairman of the city council, said the members are "very supportive" of a pied-à-terre tax because of the state of the city's vital infrastructure, such as subways and buses. social housing. The city may have to pass a law creating the tax if the legislature authorizes it.

In 2017, New York City had 75,000 landhousts, up from 55,000 since 2014, according to the New York City Vacancy and Dwelling Survey. The share of vacant flats classified as pied-à-terre remained stable during this period, at around 30%.

Kathryn Wylde, president of the New York City Partnership, said the tax would not be well received by the business community. She suggested that such a tax, combined with President Trump's decision to limit the amount of local and state taxes that can be deducted from federal income taxes – could further push the rich to reconsider their lives here.