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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

#351

Post by postflopclarity »

eli wrote: post #327
postflopclarity wrote: post #310

Earlier quoted context omitted.

I also don't expect it to have a significant effect. but any effect it does have will be in the direction of less supply.

How does a tax on SECOND homes decrease supply? Wouldn't it incentivize sales of mostly vacant properties to someone looking for buy a first home?

when you tax things you get less of it.

when you tax supply, you get less supply

many of these second homes are currently on the rental market. if there is less supply of these coming into the rental market, rent prices rise.

I don't know why everybody's brains are so broken when it comes to housing policy.

let's say you own an uninhabitable 2 family home in Brooklyn that was built in 1910 but would require serious renovation to be able to rent it out (not at all a strawman; this is incredibly common). now imagine your incentives as the property owner:

* without the pied-a-terre tax: some risk & upfront cost to renovate, but future cash flows from rental income make this incentivized

* with the tax: same risk & upfront cost, but now the future cash flows are decreased by the amount of the tax (since the assessed value will have increased)

anywhere that difference tips the scales from "renovating" to "not renovating," there is one fewer home on the market.

Re: New York passes pied-a-terre tax

#352

Post by hackeraccount »

tartoran wrote: post #37
ExoticPearTree wrote: post #27

[flagged]

If I tax you one cent would you budge? This is what this tax amounts to the ultra wealthy.

No one looks at money that way. If it were I'd find a million dollars under the seat cushions of the couch that Bill Gate's owns. No one is so flaked out they don't know that a 100 grand is a nice chunk of change or what the costs of staying vs. moving are.

Re: New York passes pied-a-terre tax

#354

Post by aianus »

ceejayoz wrote: post #264
mikhailfranco wrote: post #244

Earlier quoted context omitted.

Consumption taxes and sin taxes. Consumption tax is sales/VAT tax excluding some necessities and capital goods. Yes, there are some awkward edge cases: in the UK the exclusions were food and children's clothes, which leads to battles over prepared cold food (e.g. sandwich), takeaway and restaurant dining. Sin taxes are obviously things society might want to discourage, mainly for health reasons, like alcohol and smok…

Consumption taxes disproportionately impact the less wealthy, who spend most of what they earn on consumption of necessities. > Don't tax things you want: working / income and investment / capital gains. What if I don't want hoarding of wealth?

Canada just gives you a fixed amount of cash every year for the sales tax that they estimate that you paid on a regular amount of consumption (HST credit) which solved that problem.

I don't think it's fair that someone who earns $400k and spends $400k is paying roughly the same taxes as someone earning $400k and spending $100k. You should pay more taxes the more luxurious your life is, not the more productive you are.

Re: New York passes pied-a-terre tax

#355

Post by ycdeebs »

hungryhobbit wrote: post #323
hungryhobbit wrote: post #295

Earlier quoted context omitted.

I think to everyone but a nepo baby it's clear that the children of the rich don't deserve their wealth.

Wow, someone downvoted me? The definition of the word "deserve" is: > To deserve means to be worthy of, entitled to, or to have a valid claim to a reward, punishment, or treatment based on your actions, qualities, or circumstances So you genuinely believe that nepo babies, despite not taking actions or creating any circumstances to earn their wealth .... nevertheless deserve to have it anyway?

I flip that around. People who have worked, earned, invested, AND paid taxes their whole life “deserve” to be able to give it to whoever they want.

Re: New York passes pied-a-terre tax

#356

Post by WalterBright »

aerhardt wrote: post #349
WalterBright wrote: post #152

Earlier quoted context omitted.

> If you make the tax too high it starts discouraging the behavior you're taxing, which can paradoxically reduce overall tax revenue. The Law of Supply and Demand is not a paradox.

You could maybe somehow relate it to supply and demand dynamics, but the idea that that higher taxes can start reducing receipts after a certain point is widely credited to Laffer (although apparently there are signals of others saying similar things throughout the history of economics). The Laffer model displays an inverted U curve.

The Laffer curve is a result of the Law of Supply and Demand.

It's no different than increasing the price of X causes the sales of X to go down.

Re: New York passes pied-a-terre tax

#357

Post by gegtik »

JackFr wrote: post #199
ceejayoz wrote: post #170

Earlier quoted context omitted.

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

You might be surprised how the gov't threatening to take your house every year affects prices. And the ability to get mortgages. And new construction.

You might be surprised how it doesn't

i guess we're at an imagination stalemate now

Re: New York passes pied-a-terre tax

#358

Post by bad_username »

gen220 wrote: post #281

As a New Yorker I'm thrilled. LVT/Landlording Tax next pls :) Edit: Actually, as a property tax of nonprimary residences, is this not also effectively also a Landlording tax? Will my landlord's tax bill go up because he's not residing in my building, if my building is above the threshold assessed value of $1mm? Or are >$1mm "multi-family homes" (significant % of housing of New Yorkers in BK/Queens) exempt and this on…

Will not the landlords eventually pass the expense of the new tax on to you, the tenants? They won't like dip into their savings to pay it, will they.

Re: New York passes pied-a-terre tax

#359

Post by robocat »

pkulak wrote: post #226
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…

Yup, very "Georgist", which I'm a huge fan of. You can move your money to another country, or hide it entirely in stocks that you borrow against until you die. But, you gotta live somewhere. Land is the only thing the state really has, and it's limited; it's the best thing to tax.

You might enjoy: https://americanaffairsjournal.org/2026/05/the-appreciation-...

A book review, but contains enough information to be an interesting read.

Re: New York passes pied-a-terre tax

#360

Post by nofriend »

aianus wrote: post #354
ceejayoz wrote: post #264

Earlier quoted context omitted.

Consumption taxes disproportionately impact the less wealthy, who spend most of what they earn on consumption of necessities. > Don't tax things you want: working / income and investment / capital gains. What if I don't want hoarding of wealth?

Canada just gives you a fixed amount of cash every year for the sales tax that they estimate that you paid on a regular amount of consumption (HST credit) which solved that problem. I don't think it's fair that someone who earns $400k and spends $400k is paying roughly the same taxes as someone earning $400k and spending $100k. You should pay more taxes the more luxurious your life is, not the more productive you are…

Where's the other 300k going? If you aren't spending it, what does it matter if it all gets taxed to nothing? And if you end up spending it, then boom there's your consumption that needs to be taxed.
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