TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, March 13, 2019

NY Times: Lawmakers Support ‘Pied-à-Terre’ Tax On Multimillion-Dollar Second Homes

New York Times, Lawmakers Support ‘Pied-à-Terre’ Tax on Multimillion-Dollar Second Homes:

A plan to tax the rich on multimillion-dollar second homes in New York City has rapidly moved closer to reality, as legislative leaders in Albany and Gov. Andrew M. Cuomo have all signed off on the idea as a funding stream for the city’s beleaguered subway system.

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

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

“I think we have a mass transit system that is in crisis, public housing that is falling down around its residents and a yawning gap between the very wealthy and ordinary New Yorkers that is driving this conversation,” said Senator Brad Hoylman, a sponsor of his chamber’s pied-à-terre bill. ...

Under the Senate’s bill, a pied-à-terre tax would institute a yearly tax on homes worth $5 million or more, and would apply to homes that do not serve as the buyer’s primary residence.

It was not immediately clear how much money the tax would raise; the office of the city comptroller, Scott M. Stringer, estimated that a pied-à-terre tax would bring in a minimum of $650 million annually if enacted today. And based on the expected revenue stream, Mr. Cuomo estimated that the state could then raise $9 billion in bonds, backed by the expected taxes paid by pied-à-terre owners.

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Liberals just won’t and can’t stop destroying their cities and states.

Posted by: Anon | Mar 13, 2019 8:38:15 AM

California should look to Vancouver's vacant homes and foreign buyer taxes. Also it should look at London, Sydney, Hong Kong, Singapore and Paris which all seek to limit outside money treating residential property as investments. When the situation becomes such that local residents can't afford homes, there is an affordable housing crisis and rapidly rising homelessness, it is the obvious thing to do.

Posted by: Stephan Foley | Mar 13, 2019 5:12:53 PM

Because $238 million apartments are going to really get the homeless off the streets or provide "affordable" housing. Something tells me that the marketplace is more differentiated than that.

Posted by: ruralcounsel | Mar 15, 2019 3:49:13 AM