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New York to tax luxury second homes in NYC

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Re: New York to tax luxury second homes in NYC

#21

Post by zaphod12 »

tlogan wrote: post #16

I assume this will be challenged in court immediately. Does anyone understand whether it is likely to survive those legal challenges? EDIT: Here is a list reported by Google search but I really do not understand or know how reasonable these challenges are. Equal Protection: Owners may argue the tax unfairly treats similar properties differently based on second-home status, value threshold, or owner residence. This is…

NYS already has tax breaks for one's primary residence which varies by income and a tax on the sale of homes >$1Mil. Given how entrenched those are, I have trouble imagining a way in which this new tax is incongruous with existing rules.

Re: New York to tax luxury second homes in NYC

#22

Post by busterarm »

jjav wrote: post #19
busterarm wrote: post #12

Earlier quoted context omitted.

The top 1% of NYC residents contribute 40-48% of all personal income tax collected in NYC. When you extend that to Top 2.5% you cross 51%. Personal Income Tax accounts for around 31% of collected NYC tax revenue. "The rich" also pay property tax. NYC's poorer residents generally don't have property to pay tax on. Everyone pays sales tax equally. So how exactly are the ultra rich paying "less taxes"?

Surely you know this, but the rich are paying less percentage taxes relative to the money they have.

I'm familiar with the concept of crabs in a bucket, yes. That's why I left New York and abandoned my rent controlled apartment to do so.

Re: New York to tax luxury second homes in NYC

#23

Post by 9dev »

busterarm wrote: post #12
jmclnx wrote: post #7

> an initiative to appease Mayor Zohran Mamdani and liberal voters Taxing the rich is not a Liberal thing, but the Rich is calling it that because they do not want to pay any taxes at all. He was elected because people are starting to feel real pain and seeing the ultra rich paying far less taxes then they are. If it was up to me, I would tax all the second homes above 5 million USD and add a Luxury Tax on all valuab…

The top 1% of NYC residents contribute 40-48% of all personal income tax collected in NYC. When you extend that to Top 2.5% you cross 51%. Personal Income Tax accounts for around 31% of collected NYC tax revenue. "The rich" also pay property tax. NYC's poorer residents generally don't have property to pay tax on. Everyone pays sales tax equally. So how exactly are the ultra rich paying "less taxes"?

This claim is often repeated but simply misleading. Taxable income is only a tiny fraction of the wealth of ultra rich folks - many even take symbolic wages, because their real compensation happens in stock, which they can use to lend effectively infinite money. There's a great episode of the Ezra Klein Show on this topic too[0].

[0]: https://open.spotify.com/episode/3Jjy4drElYHNMRtxVQPENR?si=5...

Re: New York to tax luxury second homes in NYC

#24

Post by ch4s3 »

Daishiman wrote: post #13
ch4s3 wrote: post #4

Earlier quoted context omitted.

It seems like a place like Manhattan might benefit from first up-zoning the low slung sections that are currently 4-8 stories. My point here is that I'd start with trying to build enough housing before spending political capital on marginal things that neither unlock supply nor generate much revenue.

In Manhattan the low zones are due to the soil not being good for higher construction. Lower Manhattan and midtown are made of basalt stone that is extremely strong and apt for skyscrapers.

Bedrock is only a little lower in the "Midtown Gap", and in any case a lot of those 4 story buildings could be 8-10.

Re: New York to tax luxury second homes in NYC

#25

Post by ch4s3 »

nickv wrote: post #17
ch4s3 wrote: post #4

Earlier quoted context omitted.

It seems like a place like Manhattan might benefit from first up-zoning the low slung sections that are currently 4-8 stories. My point here is that I'd start with trying to build enough housing before spending political capital on marginal things that neither unlock supply nor generate much revenue.

You're right, when I think of a place that has an overabundance of 2 floor single family homes, I think of Manhattan.

You'll notice I specifically said 4 to 8 story buildings.

Re: New York to tax luxury second homes in NYC

#26

Post by tekla »

I dunno why anyone thinks this matters. https://comptroller.nyc.gov/reports/the-pied-a-terre-tax-and...

"We find that, before adjusting for these factors, our choice of tax rates and brackets could raise almost exactly $500 million from a little over 11,200 properties. However, revenues could be reduced to between roughly $340 million and $380 million based on assumptions on exclusions for rented units and behavioral changes following the imposition of the tax."

It's all media feel goodsies but not actually do anything substantive.

Re: New York to tax luxury second homes in NYC

#27

Post by lovich »

busterarm wrote: post #22
jjav wrote: post #19

Earlier quoted context omitted.

Surely you know this, but the rich are paying less percentage taxes relative to the money they have.

I'm familiar with the concept of crabs in a bucket, yes. That's why I left New York and abandoned my rent controlled apartment to do so.

Oh shit, I didn’t realize the billionaires who can have multiple homes in Manhattan are crabs in the same bucket as us.

Luckily the law is much more egalatarian and bars the rich and poor alike from sleeping under bridges or stealing bread.

Re: New York to tax luxury second homes in NYC

#28

Post by free_bip »

tekla wrote: post #26

I dunno why anyone thinks this matters. https://comptroller.nyc.gov/reports/the-pied-a-terre-tax-and... "We find that, before adjusting for these factors, our choice of tax rates and brackets could raise almost exactly $500 million from a little over 11,200 properties. However, revenues could be reduced to between roughly $340 million and $380 million based on assumptions on exclusions for rented units and behavioral…

So it'll still raise at least 300 million? Sounds like a great thing to me. I dunno why you think it doesn't matter.

Re: New York to tax luxury second homes in NYC

#30

Post by nickv »

busterarm wrote: post #12
jmclnx wrote: post #7

> an initiative to appease Mayor Zohran Mamdani and liberal voters Taxing the rich is not a Liberal thing, but the Rich is calling it that because they do not want to pay any taxes at all. He was elected because people are starting to feel real pain and seeing the ultra rich paying far less taxes then they are. If it was up to me, I would tax all the second homes above 5 million USD and add a Luxury Tax on all valuab…

The top 1% of NYC residents contribute 40-48% of all personal income tax collected in NYC. When you extend that to Top 2.5% you cross 51%. Personal Income Tax accounts for around 31% of collected NYC tax revenue. "The rich" also pay property tax. NYC's poorer residents generally don't have property to pay tax on. Everyone pays sales tax equally. So how exactly are the ultra rich paying "less taxes"?

Because wealth is also distributed in a very lumpy way across the city.

154 residents of NYC own 33% of the entire wealth of the city... notice I didn't say 1%, I said top 154. They are not contributing 33% of the tax income to the city.

So yes, the ultra rich pay "less taxes" if you look at how much of the resident wealth they control.

Also, property taxes are significantly lower than appraised value and the richer you get the bigger the disparity. That Ken Griffin’s $238M penthouse pied-a-terre? It's assessed value is $9M. So yea, he's paying like $150k/yr in property taxes.

And finally, it is a known fact that sales tax definitely hits poor people harder (re: "everyone pays sale tax equally"). What you want to look at is what percentage of a person's post taxincome vs sales tax paid, because if you make like $60k/yr you're probably close to 60% of all post tax income paying some form of sales tax (you buy with all the money you make). If you have $2B, your percentage of "tax paid as sales tax" is significantly lower, because you don't typically spend a billion dollars the same way you spend $60k.

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