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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

#41

Post by gowld »

altruios wrote: post #17
cjs_ac wrote: post #12

> New York City’s new tax on second homes will more than double property taxes owed by many wealthy luxury apartment owners, according to tax experts. > State lawmakers on Wednesday passed the tax on nonprimary residences in order to help close the city’s budget gap. The so-called pied-a-terre tax will be imposed on second homes valued at $1 million or more. It’s expected to raise $500 million in revenue. > Details o…

Second homes (and beyond) should be taxed out of existence while people are still trying to find their first. This tax is not steep enough, but it's a start.

Taxing a pied-a-terre $40K/yr or more per year provides more resources for developing housing than simply evicting the owner and reclaiming the space. There aren't enough pied-a-terres to house the people who need housing. We need expensive premium housing to fund affordable housing at scale.

Re: New York passes pied-a-terre tax

#42

Post by blitzar »

elevation wrote: post #35
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…

[flagged]

The elites always promise us trickle down economics, maybe this time it will happen. I wont hold my breath though.

Re: New York passes pied-a-terre tax

#43

Post by sunshowers »

DocTomoe wrote: post #20
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…

1 million remains the hallmark of 'wealthy' (as in: not us), to the point where pop culture has started mocking the concept decades ago (See: That Austin Powers movie...) Hardly everyone understands 'owning a house' as millionaire-level wealth. Which is why people cheer the policy on until they realize it is them who is being shaken down.

In what world is 1 million US not wealthy? Have tech salaries distorted people's opinions that much?

Owning a house where your equity in it is over a million is absolutely wealthy.

Re: New York passes pied-a-terre tax

#44

Post by hibikir »

If this has a problem, it's the difficulty of application: 2nd homes, and only if you have X amount of money, instead of just a flat increase. Property taxes (or really, in NYC land taxes, as most of the property tax is really the value of the land) are just very efficient, and make much less of a difference on the price of rents than you'd think.

Unfortunately, doing that is very unpopular. Unpopular enough that we see states trying to get rid of property taxes, and those providing limits to increases, which basically guarantee misallocation and rising prices. But what is economically reasonable and what the voters like have very little to do with each other.

Re: New York passes pied-a-terre tax

#45

Post by dml2135 »

altruios wrote: post #17
cjs_ac wrote: post #12

> New York City’s new tax on second homes will more than double property taxes owed by many wealthy luxury apartment owners, according to tax experts. > State lawmakers on Wednesday passed the tax on nonprimary residences in order to help close the city’s budget gap. The so-called pied-a-terre tax will be imposed on second homes valued at $1 million or more. It’s expected to raise $500 million in revenue. > Details o…

Second homes (and beyond) should be taxed out of existence while people are still trying to find their first. This tax is not steep enough, but it's a start.

[dead]

Re: New York passes pied-a-terre tax

#46

Post by robbiewxyz »

everdrive wrote: post #21

I'm really curious about this. Wont, as a rule, any super-rich 2nd, 3rd, and 4th homes in New York be completely unaffordable for almost everyone? It feels a bit like you're potentially spreading around the super-luxury homes across a wider breadth of the super-rich, but not much else. Is there a better way to think about this?

For startets, the revenue raised makes NYC as a city more sustainable by funding social programs for the normal people who keep the lights on.

Re: New York passes pied-a-terre tax

#47

Post by lorecore »

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?

Miami? Have you checked home insurance rates lately? The thought of these NYC second home owners getting gutted by the next hurricane is rather amusing though.

Re: New York passes pied-a-terre tax

#48

Post by mil22 »

cjs_ac wrote: post #12

> New York City’s new tax on second homes will more than double property taxes owed by many wealthy luxury apartment owners, according to tax experts. > State lawmakers on Wednesday passed the tax on nonprimary residences in order to help close the city’s budget gap. The so-called pied-a-terre tax will be imposed on second homes valued at $1 million or more. It’s expected to raise $500 million in revenue. > Details o…

> In the UK, the equivalent tax on housing is council tax, and local councils in Great Britain (but not Northern Ireland) are empowered to double the rates of council tax on second homes.

Very interesting to know. Many readers may not be aware that council tax in the UK is quite regressive and tops out at ~£4-5K / year on properties valued higher than ~£1M. So you can own a £5M GBP house and still pay only £5K / year for an annual effective property tax rate of just 0.1%.

This is one of the reasons buying a luxury house in the UK is comparatively quite cheap in terms of total cost of ownership compared to many states in the US where you have to pay much higher property tax rates, insurance, and so on.

So even if the council tax is doubled on a second home, you still might be paying only 0.2%. Compare that to an average property tax rate of ~1.8% in NYC (before pied-a-terre).

Re: New York passes pied-a-terre tax

#49

Post by vardalab »

elevation wrote: post #35
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…

[flagged]

Because it's a tax I think on second properties.
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