The Real Deal New York

Pied-à-terre owners don’t deserve a free ride: OPINION

Advocates for tax say non-residents' homes also take advantage of key city services

November 03, 2014 12:13PM

pied-a

Brad Hoylman and a pied-à-terre unit at 781 Fifth Avenue on the Upper East Side

Although advocates for the New York City’s proposed pied-à-terre tax on $5 million-plus units argue that non-city residents cost the city very little, all apartments take advantage of major city services, according to an opinion piece in the New York Observer.

The Observer’s Kim Velsey wrote that the investments of the wealthy non-city residents with pieds-à-terre are protected by civil services that maintain a “peaceful civil society.” She said the affluent investors buy real estate in the city out of economic self-interest, not benevolence.

“Certainly these buildings benefit from our uniformed agencies—police, fire, sanitation—and they use the city’s infrastructure, the subways and parks and cultural institutions,” State Senator Brad Hoylman, who is set to introduce the controversial bill in Albany, told the newspaper. Real estate insiders and tax policy experts have said that the tax might have a chilling impact on the market, as The Real Deal reported. [NYO]Mark Maurer

  • Barry

    They are not getting a free ride…they pay property taxes..

  • Ridiculous

    What’s greedier, wanting to keep what you earned or wanted to keep what someone else has earned? This world is completely ass backwards and upside down.

  • Sun0flalaland

    Even if they don’t use the services, they are taking up space from buyers who otherwise would (non pied-a-terre owners), and who would pay normal tax rates if PAT weren’t subsidized.

  • Arik Lifshitz

    We are all arguing over the scraps and missing the big picture. Read the text of the bill. The tax is going to apply to almost every Multi-family rental property in the city. http://open.nysenate.gov/legislation/bill/S7941-2013

    The tax applies to tax class 1 and 2 properties. See the definition of a class 2 property. http://www.nyc.gov/html/dof/html/property/property_val_glossary.shtml

    Pied a terre’s are only a tiny portion of the affected properties. This tax will hit almost every rent regulated property in the city aside from the smallest buildings.

    • JEng

      Thank you. That is quite cruel to small buildings especially since they are usually rent regulated. Another “encouragement” to sell, huh?

      There is no way a rent regulated building where the government and press lament having to raise the rent by one percent instead of a desired zero percent – is justifiably charged an additional property tax. It’s blatant and brazen bias against small buildings contradicting the advocacy for affordable housing.

      Why can’t they exclude rent regulated buildings?

  • Leonard Steinberg

    BRAD HOYLMAN is (almost) funny now: FREE is not paying real estate taxes, every single year, as much as your full time neighbors. FREE is not paying transfer taxes. FREE is not paying mansion taxes. All these BAD PIED-A-TERRE OWNERS pay these taxes and use all our government provided services considerably less than anyone who lives here full time. Yikes! Who voted for this dummy?

  • Barry

    I’m not sure why this is limited to a city with a million or more residents …I can’t wait until the Hampton’s catches in to this scam

  • David Brown

    From the perspective of politicians the greatest tax in the world is one they can apply on people who live and more importantly vote elsewhere. It is a political win-win. Does it make economic or moral sense? Probably not. After all welfare mothers benefit from those uniformed city services just as much as the pied-a-terres but I don’t see any legislation to cut back welfare payments to pay for them.

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