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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

#201

Post by cakealert »

ceejayoz wrote: post #195
cakealert wrote: post #189

Earlier quoted context omitted.

When you invest money it disappears from your control and you get a piece of paper that says you own shares in an entity.

And if you're investing in, say, a Fabergé egg, that's a (potential) problem. If you invest in $AMZN, much less so.

> If you invest in $AMZN, much less so.

But that's only because there are other people who will happily move money into your control to get that share from you. Doesn't change the fact that the money you spent acquiring it has moved out of your control onward in the economy.

Re: New York passes pied-a-terre tax

#202

Post by everforward »

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…

> Why not use it?

It dramatically cuts housing security, and allows local governments to inflate their own property values by doing what is basically eminent domain without the requirement to show need. Make everyone pay taxes, use those to buy up homes, re-list the homes at a higher price. They can effectively price gouge using tax dollars. This could happen to you at literally any point, and that local government doesn't care if the house won't even sell as long as the other houses rise enough in value to cover the lost tax revenue.

I've also heard the same thing but allowing private citizens to buy them, which is almost worse. Anyone sufficiently well off can just wreck someone else's life. If I hate my neighbor and they report the real value of their house, I can force them to sell it to me so they have to move and I can resell it while only losing fees in the process. They would have to over-value their house by an amount that I'm not okay losing, which ends in a sort of auction of escalating values. At the very tippy top, if I'm Warren Buffet's neighbor there's probably not a value I can pay taxes on that would stop him from buying me out if he wanted. Any number that would be a meaningful loss to him is something I can't even pay the taxes on.

Re: New York passes pied-a-terre tax

#203

Post by JackFr »

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.

Ignore the downvotes -- that is an insane system.

Re: New York passes pied-a-terre tax

#204

Post by dirtikiti »

arw0n wrote: post #110
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…

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.

So you want to tax something that has already been taxed throughout the course of someone's life, just because they want to give it to their kids?

The only tax that is fair to everyone is a sales tax.

Re: New York passes pied-a-terre tax

#205

Post by ryandrake »

koliber wrote: post #150
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.

The problems with inheritance tax is that they can be avoided through trust structures and insurance schemes. In theory it's a good tax, but in practice many wealthy people figured out how not to pay it.

Those schemes are also human-created though, and can be human-fixed. I've never really understood the arguments that go like: "This regulation won't work because the people it targets will avoid it through loopholes and other schemes." Well, get rid of the loopholes and schemes, then!

Granted, this requires lawmakers to explore more of the "exploit space" around their proposed regulations, but I don't think that's really asking a lot of them.

Re: New York passes pied-a-terre tax

#206

Post by waisbrot »

ceejayoz wrote: post #125
GenerWork wrote: post #36

This is fantastic news for the Miami real estate market. Does anybody has stats as to how many homes this would actually affect?

Boston hasn't seen the doomers' hypothesized capital flight from their wealth tax. The opposite, in fact. https://www.bostonglobe.com/2026/05/25/metro/millionaires-ta...

Now picture NYC, symbolic of wealth and power. Owning property there is a great way to show off.

This tax may make it more attractive to own a second home there, because it proves you're not one of the fake-wealthy who can't afford the price.

Re: New York passes pied-a-terre tax

#207

Post by SoftTalker »

gruez wrote: post #167
SoftTalker wrote: post #135

Earlier quoted context omitted.

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"?

Property taxes on real property or possibly land value tax (it's a limited resource, at least in places where people want to live, and requires a lot of public infrastructure to support its value there).

Tariffs, various usage taxes and fees.

Need a mechanism to address the regressiveness of some of this but that's an implementation detail.

Re: New York passes pied-a-terre tax

#208

Post by dirtikiti »

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

No, the goal is to overhaul the property tax system.

This is going to raise property taxes for everyone.

The ultra wealthy can just pack up and move. It doesn't affect them in the slightest.

But in two years when the property tax overhaul is complete, the middle class will foot the bill. As per usual.

Re: New York passes pied-a-terre tax

#209

Post by jmye »

DocTomoe wrote: post #26
toomuchtodo wrote: post #16

Earlier 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…

Why is this mythical "everyman" you've concocted for empathy points not selling a property he doesn't need that happens to be worth a "magic 7 figures"?

Re: New York passes pied-a-terre tax

#210

Post by SoftTalker »

lazide wrote: post #151
SoftTalker wrote: post #135

Earlier quoted context omitted.

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.

First one makes sense, second one I’m quizzical about. Inheritance taxes tend to only kick in at the 8+ digit range. If anything, taxing that should encourage descendents to do productive work, eh? Since not taxing it, but taxing other things actually discourages it? I can’t imagine how it would result in anyone relying on public largesse either unless they are really terrible with money. In which case a few extra ze…

I suppose like with many things it's a question of scale. A little is good, more is better, but at some point it may start to have negative consequences.
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