New York City has heard a lot of talk about real estate and taxes of late. Particularly, about the tax revenue raised when super-rich foreigners buy super expensive apartments in the city. However, much of the tax generating potential of billionaire pieds-à-terres is myth, according to Crain’s.
Recently, Mayor Michael Bloomberg said that he hoped even more billionaires would buy in NYC because they run up massive tax bills, which supports the government, which in turn supports populist programs.
But in reality, as nonresidents, these billionaires pay no city or state income tax. Moreover, the real estate taxes on their $100 million penthouses are bargain-basement steals, according to Crain’s. The elimination of a special abatement for properties that sell for more than $5 million was the first step in making the rich actually contribute a fair share, but a higher real estate transfer tax and a tax on non-primary residences would go a long way to that goal, according to a report by the city’s Independent Budget Office. [Crain’s] –Christopher Cameron