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New York passes pied-a-terre tax

cnbc.com

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Re: New York passes pied-a-terre tax

#161

Post by sandeepkd »

Aurornis wrote: post #95
burlesona wrote: post #22

Property 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…

> If it turns out the uber-rich don't mind paying and this becomes a cash cow for the city, that creates incentives for the city to cater to them and try and get more uber-rich people to have second homes in the city. The tax is reasonably small enough that I wouldn't expect a lot of wealthy people from divesting from their properties, but it's probably going to make them think twice about buying new properties. That…

I think its a good idea in general to tax the second property for any country where housing is a struggle. Its usage based taxation so fair in some sense. Housing is somewhat of a critical asset for a normal safe life. Commercialization of housing properties creates a circular effect on the pricing, thereby increasing the cost of almost everything else.

Re: New York passes pied-a-terre tax

#162

Post by postflopclarity »

burlesona wrote: post #22

Property 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…

> I'll be interested to see if it helps create some liquidity in the housing market

lol. why would it? if you tax something, you get less of it.

there is not even close to any kind of shortage of demand for housing in NYC. there is an enormous shortage of supply; it is in fact _illegal_ in most places to build more supply.

Re: New York passes pied-a-terre tax

#163

Post by tantalor »

petcat wrote: post #122
VikingCoder wrote: post #106

> While the tax seems large, experts say the city’s antiquated assessment and valuation system dramatically undervalues properties, reducing the burden. City valuations can often be 10% or less of the true market value, they said. I heard about a system for this that struck me as brilliant. Make someone declare the value of their property. Then the government has the choice of taxing them at the scheduled rate, or bu…

What happens after the city buys it? Also, most municipalities do not have the funds on hand to buy up people's houses just to call their bluff on taxes.

conservatorship

Re: New York passes pied-a-terre tax

#164

Post by gruez »

blactuary wrote: post #148
Aurornis wrote: post #95

Earlier quoted context omitted.

> If it turns out the uber-rich don't mind paying and this becomes a cash cow for the city, that creates incentives for the city to cater to them and try and get more uber-rich people to have second homes in the city. The tax is reasonably small enough that I wouldn't expect a lot of wealthy people from divesting from their properties, but it's probably going to make them think twice about buying new properties. That…

The goal of this isn't simply to raise revenue, it's also to discourage parking money in empty properties when it's one of the most expensive cities to live in and doesn't have enough housing

>it's also to discourage parking money in empty properties when it's one of the most expensive cities to live in and doesn't have enough housing

Is that really needed when the homeowner vacancy rate is 1.3% in the New York-Newark-Jersey City MSA?

https://www.census.gov/housing/hvs/data/rates.html

Re: New York passes pied-a-terre tax

#165

Post by Jblx2 »

onlyrealcuzzo wrote: post #7

I 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…

>Why's there an obsession with the $1m cutoff?

I think this is because the term "millionaire" is a catchy term. And that caught on in the 1800s.

Re: New York passes pied-a-terre tax

#166

Post by cucumber3732842 »

toomuchtodo wrote: post #16
nemomarx wrote: post #13

Earlier quoted context omitted.

It affects wealth, but the owner can also sell the property to someone who'll live in it and then they won't be taxed despite owning expensive property. So it's more targeted than a general wealth tax would be and I think the intent is to free up housing supply a bit.

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…

>Edit: You start somewhere and keep tightening the policy ratchet as loopholes or other policy leakage are detected. You've found a clever hack? Congrats! The law is updated accordingly.

God I hate this sort of armchair despot type thinking.

People are not stupid. They're only ok with the absurd attitude given to the government to tax and regulate insofar as it's mostly kept it out of the grubby mitts of those who'll abuse it.

Like yeah, you absolutely could strictly enforce the speed limit and use the clean water act to regulate people's lawns but if you did that someone would get elected on promises to depose you and change the law to prevent that in the future.

This is the same reason the NSA doesn't go around using zero days on movie pirates and the FBI doesn't go around bringing RICO charges on everyone who ever ran a scummy business. The power is more useful to have on hand to use surgically. If you abuse it you'll lose it.

Re: New York passes pied-a-terre tax

#167

Post by gruez »

SoftTalker wrote: post #135
arw0n wrote: post #110

Earlier quoted context omitted.

The fairest and easiest to realize wealth tax is on inheritance. It is great to want to give your kids a headstart in the world, it is terrible for them and the people around them to set them up for life.

I would disagree, I think income taxes and inheritance taxes are morally wrong. Earning money to support oneself and family instead of relying on public largesse should not be taxed. Passing the fruits of a lifetime of work to ones heirs so they can continue do productive work instead of relying on public largesse should not be taxed.

>I would disagree, I think income taxes and inheritance taxes are morally wrong.

So what taxes aren't "morally wrong"?

Re: New York passes pied-a-terre tax

#168

Post by petcat »

zeeveener wrote: post #156
petcat wrote: post #122

Earlier quoted context omitted.

What happens after the city buys it? Also, most municipalities do not have the funds on hand to buy up people's houses just to call their bluff on taxes.

They attempt to sell it at market-rate which, assuming the previous owner intentionally under-valued the house, would earn them money that they can use to continue the program.

What if they have a backlog of inventory that they can't sell at "market rate"? Are the taxpayers just supposed to take a loss because of this brilliant tax assessment scheme?

Re: New York passes pied-a-terre tax

#169

Post by neckardt »

nonethewiser wrote: post #141
VikingCoder wrote: post #106

> While the tax seems large, experts say the city’s antiquated assessment and valuation system dramatically undervalues properties, reducing the burden. City valuations can often be 10% or less of the true market value, they said. I heard about a system for this that struck me as brilliant. Make someone declare the value of their property. Then the government has the choice of taxing them at the scheduled rate, or bu…

> Then the government has the choice of taxing them at the scheduled rate, or buying the property from them, for that cost. Uhh... what? How is this not an insane system? 1. You give an accurate, good faith projection. 2. Government taxes you. OR Government buys your house. Weird. You buy a comparable house with the proceeds. 3. Repeat.

The government would only buy your house if you underestimated the value of your property. You wouldn’t be able to buy a comparable house with the proceeds because it got sold for much less than it was worth.

Re: New York passes pied-a-terre tax

#170

Post by ceejayoz »

petcat wrote: post #168
zeeveener wrote: post #156

Earlier quoted context omitted.

They attempt to sell it at market-rate which, assuming the previous owner intentionally under-valued the house, would earn them money that they can use to continue the program.

What if they have a backlog of inventory that they can't sell at "market rate"? Are the taxpayers just supposed to take a loss because of this brilliant tax assessment scheme?

I assure you, unloading property in NYC purchased below actual market value will not be a huge challenge.
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