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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

#191

Post by cakealert »

EliRivers wrote: post #100
cakealert wrote: post #62

Earlier quoted context omitted.

> 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?

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.

Re: New York passes pied-a-terre tax

#193

Post by jandrewrogers »

neckardt wrote: post #169
nonethewiser wrote: post #141

Earlier quoted context omitted.

> 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.

The option to buy the asset is discretionary. The government can buy it for any reason at any price. Furthermore, many of these assets are not commodities. What is the value of a thing for which only one exists?

Re: New York passes pied-a-terre tax

#195

Post by ceejayoz »

cakealert wrote: post #189
swiftcoder wrote: post #105

Earlier quoted context omitted.

> what do you think investment does? Accrue more money pretty much indefinitely?

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.

Re: New York passes pied-a-terre tax

#196

Post by nonethewiser »

strongpigeon wrote: post #104
nemomarx wrote: post #4

On unoccupied or secondary residences specifically, not on wealth overall. This is more of a housing policy?

It's a luxury tax that only affects people wealthy enough to have a second home in NYC. These people, by virtue of not living there, aren't paying income tax and thus don't contribute as much as someone who is.

>t's a luxury tax that only affects people wealthy enough to have a second home in NYC.

Not exclusively though, right?

Since they are revising the valuation system to not artificially depress valuations, isnt this a global tax increase? No rate changes or extra tax for someone with a primary residence but the base is increasing, right?

>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 immediately, the city will gradually update valuations – and the tax – according to the budget documents. Starting in the 2028-2029 tax year, the property values will be based on comparable sales. Since valuations will skyrocket, the tax rates will fall to compensate.

Re: New York passes pied-a-terre tax

#197

Post by craftkiller »

jimbob45 wrote: post #74
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…

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.

Wouldn't excluding apartments therefore exclude Ken Griffin's 238 million dollar penthouse? That seems like exactly the kind of 2nd home that this should be targeting.

Re: New York passes pied-a-terre tax

#199

Post by JackFr »

ceejayoz wrote: post #170
petcat wrote: post #168

Earlier quoted context omitted.

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.

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.

Re: New York passes pied-a-terre tax

#200

Post by dirtikiti »

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…

Property tax is not a workable wealth tax.

It's a barrier for low income people to buy homes.

Sales tax is a workable wealth tax.

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