Earlier quoted context omitted.
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Because it's a tax I think on second properties.
Yes and the second property must be mostly vacant, ie. not rented out as the primary residence of some other occupant.
New York passes pied-a-terre tax
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Re: New York passes pied-a-terre tax
#72Property tax is the workable wealth tax. There's no such thing as a perfect policy, but in the context of NYC this seems worth trying. I'll be interested to see if it helps create some liquidity in the housing market (the goal), or if it only functions as revenue source. One wrinkle I haven't heard much discussion of -- cities respond to incentives too. NYC is a global destination for the mega wealthy. If it turns ou…
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Separate commercial and residential rates? The first $X dollars are not taxed?
We can and have done this.
Re: New York passes pied-a-terre tax
#73What's to stop them from selling to a holding company so that it's not literally his own second house?
Re: New York passes pied-a-terre tax
#74I think this is in the right direction, but the cut off at $1M is interesting. Why's there an obsession with the $1m cutoff? The dollar has been turned to dust. $1M is not that much money, especially in housing, especially in NYC. Why tax $1m second homes and not second homes generally? Effectively, you're going to tax almost all second homes. So why the arbitrary cutoff? Chicago wanted to add a "millionaire's tax" o…
I agree and I’d prefer to see apartments excluded from this. Apartments are what I want second-homeowners to own rather than hoarding valuable land.
Re: New York passes pied-a-terre tax
#75Earlier quoted context omitted.
I think it is unlikely anyone with a second home at these price levels is going to sell to avoid this (immaterial to them) tax. But certainly, if they do sell to someone who will occupy as primary residence, that's also a win, regardless of the coin flip (heads, wealth tax, tails, more housing for those who actively live in the city). Edit: You start somewhere and keep tightening the policy ratchet as loopholes or ot…
In reality, they will now just create a company in Singapore or Mongolia or another such place, which will then own the second home - while itself being owned by the original owner. Problem solved significantly cheaper than this new tax. In fact, I would not be surprised if they have already done that four months ago, when the law was being discussed. The ones who will be hit are those who do not have the legal frame…
Isn't that a good thing? It would encourage Joe Homeowner to sell the house to someone who could use it as a primary residence rather than leaving it empty and speculating on the real estate value.
Re: New York passes pied-a-terre tax
#76Earlier quoted context omitted.
The elites always promise us trickle down economics, maybe this time it will happen. I wont hold my breath though.
> The elites always promise us trickle down economics, maybe this time it will happen. Are you under the impression that the wealthy keep their money in a savings account? They have more money than they can spend so they invest it, what do you think investment does?
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Re: New York passes pied-a-terre tax
#77> New York City’s new tax on second homes will more than double property taxes owed by many wealthy luxury apartment owners, according to tax experts. > State lawmakers on Wednesday passed the tax on nonprimary residences in order to help close the city’s budget gap. The so-called pied-a-terre tax will be imposed on second homes valued at $1 million or more. It’s expected to raise $500 million in revenue. > Details o…
> In the UK, the equivalent tax on housing is council tax
Council tax is difficult to compare to a percentage based property tax - the band based system means people in super valuable homes pay virtually nothing, at least relative to the value of the property, and each of the ~8 bands pays a fixed fee - once in the max band the tax stays the same no matter how valuable the home.
This is especially acute in places like Scotland, where the top band kicks in at anything over 212,000 and hasn't been adjusted since 1991... Essentially any new build starter home in many places will automatically be in the top band and taxed the same as some dude who bought a castle for millions.
Personally I've never thought of council tax as a property tax, even if the bands superficially are linked to it- the link to underlying property values is so broken now.
My first rented flat outta college was taxed at the highest band, and I sure wasn't rich then. It's widely argued to be a very regressive form of taxation - its opponents indeed argue it should be replaced with an actual property tax.
Re: New York passes pied-a-terre tax
#78I think this is in the right direction, but the cut off at $1M is interesting. Why's there an obsession with the $1m cutoff? The dollar has been turned to dust. $1M is not that much money, especially in housing, especially in NYC. Why tax $1m second homes and not second homes generally? Effectively, you're going to tax almost all second homes. So why the arbitrary cutoff? Chicago wanted to add a "millionaire's tax" o…
1 million remains the hallmark of 'wealthy' (as in: not us), to the point where pop culture has started mocking the concept decades ago (See: That Austin Powers movie...) Hardly everyone understands 'owning a house' as millionaire-level wealth. Which is why people cheer the policy on until they realize it is them who is being shaken down.
Almost nobody casually owns a second home in New York worth $1m or more. What a dumb comment (like pretty much every comment criticizing this tax--just stupid and immoral).
Re: New York passes pied-a-terre tax
#79$ have to come from somewhere, with the Fed cutting taxes for the rich and benefits for the poor every other term, time for the states to take over.
The Fed (with a capital F) refers to the Federal Reserve which explicitly does not control tax policy.
Re: New York passes pied-a-terre tax
#80I'm really curious about this. Wont, as a rule, any super-rich 2nd, 3rd, and 4th homes in New York be completely unaffordable for almost everyone? It feels a bit like you're potentially spreading around the super-luxury homes across a wider breadth of the super-rich, but not much else. Is there a better way to think about this?
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