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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

#371

Post by swiftcoder »

cakealert wrote: post #191
EliRivers wrote: post #100

Earlier quoted context omitted.

To what degree do they really invest it? A lot of rich people just buy shares (other than at an IPO) and just move money around each other's pockets rather than investing in something wealth creating, or just swap already-existing overpriced properties around each other.

> move money around each other's pockets rather than investing in something wealth creating So your claim is that wealthy people aren't interested in generating more wealth for themselves? What exactly is it you are claiming? Sounds like something a populist youtuber would say.

> So your claim is that wealthy people aren't interested in generating more wealth for themselves?

The claim is that wealthy folks aren't typically interested in generating more wealth for other, non-rich folks

Re: New York passes pied-a-terre tax

#372

Post by nonethewiser »

eli wrote: post #330
nonethewiser wrote: post #234

Earlier quoted context omitted.

Its part of the same law. Regardless, the appraisal changes are global, right? That is, it would apply to a $200M 17th home and a $750k residence alike, right?

No, there is no global change that I'm aware of.

Look at the article. It changes appraisals to be comparable sales. Thats how property taxes work in general for NYC. Do you see anything that says this change is scoped to these 2nd homes over 1M? I cant find that specified anywhere - it only mentions the general method.

Re: New York passes pied-a-terre tax

#373

Post by bonsai_spool »

ycdeebs wrote: post #361
ryandrake wrote: post #205

Earlier quoted context omitted.

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 re…

The only way to get rid of tax avoidance is to simply tax transactions, every time, for every person, on every transaction. “Oh, that’s regressive” they will say. Make it small per transaction. A rich person spending 100x what a normal person spends will pay 100x as much tax. A billionaire spending 10000x what a normal person spends will pay 10000x as much. And they will also be taxed if they borrow money (that’s a t…

> And when someone inherits, that’s also a transaction. Money moves from one person to another. So that same tax applies.

This is a big one—we continually decrease the estate tax, which is already waived until you get to 'fuck-you-money' at the federal level (around $11 M)

Re: New York passes pied-a-terre tax

#374

Post by nonethewiser »

ceejayoz wrote: post #286
nonethewiser wrote: post #262

Earlier quoted context omitted.

New apartments? NYC? I jest. Im not sure you understand what Im saying though. Wouldnt normal people's taxes go up because the appraisal changes are global? Say, a primary residence bought for $750k.

> Wouldnt normal people's taxes go up because the appraisal changes are global? No. Our town finally reassessed everyone after not doing it since before COVID. Assessments doubled and everyone freaked out, but the tax levy didn't change, so the amount of actual tax basically didn't change; $160M in taxes for 20k people is still $160M in taxes for 20k people. People just now pay less tax per $1k house value, but for h…

Is your town NYC?

From what I see its 20% of the assessed value in NYC (which is currently significantly lower than market value).

Re: New York passes pied-a-terre tax

#375

Post by jamiequint »

apparent wrote: post #285
jamiequint wrote: post #111

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." I am generally against more taxes, but the structure of this one is quite good in terms of the incentives. If wealthy people who only live in the city part-time stay in hotels instead of buying second homes, the net effect should be to increase the cost of hotel rooms and reduce the co…

> increase the cost of hotel rooms and reduce the cost of owned-housing Reducing the cost of $5M+ homes will slightly help some wealthy people who live in NYC, and there will be a modest trickle-down effect into less expensive properties. But I thought the goal was to generate tax revenue from the taxes, which wouldn't happen to the extent they end up in the hands of NYC residents. EDIT: apparently it hits all homes…

"I thought the goal was to generate tax revenue from the taxes, which wouldn't happen to the extent they end up in the hands of NYC residents."

You're right, I'm saying I think it is a good tax for reasons secondary to revenue. We all know NYC is going to squander the money, at least they might make housing slightly cheaper for the average New Yorker in the process.

Re: New York passes pied-a-terre tax

#376

Post by beagle3 »

MSFT_Edging wrote: post #216
throwaway2037 wrote: post #173

Earlier quoted context omitted.

> we'd still be on the hook for taxes for (iirc) 15 years This is defintely not true. I did some light Google searches and I cannot anything. There is an exit tax, but only applies if your net worth exceeds 2million USD.

Turns out it's an old law, if you expatriated between 2004 and 2008, and spent 30+ days in the US within 10 years of expatriation. > Further, expatriated individuals will be subject to U.S. tax on their worldwide income for any of the 10 years following expatriation in which they are present in the U.S. for more than 30 days, or 60 days in the case of individuals working in the U.S. for an unrelated employer.

IIRC, this law was a result of Ted Arrison giving up his US citizenship very shortly before death, saving a few billions for his heirs.

The law was hastily passed to discourage copycats while working on the exit tax law without haste.

Re: New York passes pied-a-terre tax

#378

Post by dirtikiti »

ethbr1 wrote: post #334
dirtikiti wrote: post #293

Earlier quoted context omitted.

this is literally a cover to overhaul the property tax assessment system in New York. https://www.msn.com/en-us/money/companies/new-york-passes-ma... "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. Rather than overhaul the system immediat…

>> City valuations can often be 10% or less of the true market value > this is, at minimum, a 10% increase in ALL property taxes If they're ~10x'ing the erroneously low valuation to true them to market value, then that would be more than a 10% increase. >> Since valuations will skyrocket, the tax rates will fall to compensate But as the article points out, this is an expected outcome and will be blunted by subsequent…

>>But as the article points out, this is an expected outcome and will be blunted by subsequent tax rate decreases.

the tax rate decrease will be on the multi-million dollar homes.

not on the new property tax valuations of everything else.

Re: New York passes pied-a-terre tax

#379

Post by sfmike »

Against all new tax. It's spent too inefficiently. Why does there need to be more New York Learing Centers. Would you keep adding buckets of water into a leaky boat or try to patch where it's leaking first?

Re: New York passes pied-a-terre tax

#380

Post by VikingCoder »

jandrewrogers wrote: post #185
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…

It isn't done because it has overt pathological economic characteristics. This forces the owner to write a long-term call option on a non-commodity asset without even collecting the offsetting risk premium expected for such a call option. This puts the asset permanently underwater by construction, which would crater asset values. The maths don't math. You can't just pick one side of a balanced equation and pretend th…

> It isn't done because it has overt pathological economic characteristics.

A secondary home over $1 million in value also has overt pathological economic characteristics. Especially if the taxes paid on it are tragically low.

> This forces the owner to write a long-term call option on a non-commodity asset without even collecting the offsetting risk premium expected for such a call option.

Eminent domain already exists.

> without even collecting the offsetting risk premium

You get to have a second home, in New York, with a value of over $1 million.

Yes, I'm proposing taxation and regulation on top of that.

But, knowing this law exists, everyone gets to make the choice whether they want it or not.

We also have the legal mandate to institute taxes in the first place. You also did not collect an offsetting risk premium for that, and had no right to expect one.

> This puts the asset permanently underwater by construction

Eminent domain already did that. And you're saying "permanently," but I think you could fairly easily steel-man my proposal to say that the government has a certain number of days after property taxes are paid to declare their intention to collect. That's different from "permanently."

I'm not an expert, by any means.

But you also just described what buying a house in an HOA is like. You have no idea what future fees will be like. And you have very little control. And many HOAs can foreclose on your house, if you don't pay their fees. John Oliver did a whole segment on it. And something like 80% of new home construction is under an HOA.

So, why should I have an over-abundance of sympathy for people, with a secondary home, in NY City, worth over $1 million?

Maybe the whole concept of a secondary home over $1 million in value, in New York city, should just not exist?

Or, maybe it should exist, but the taxes should be pretty damn high, and they should be based off of a pretty damn fair assessment of value. I'm all open to counter-proposals of how to get a more equitable assessment of value.

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