State pols make pied-à-terre tax a priority for 2021

Opponents warn tax could give wealthy full-time residents reason to leave

New York /
Dec.December 07, 2020 09:06 AM
Sen. Brad Hoylman (Getty; iStock)

Sen. Brad Hoylman (Getty; iStock)

The pied-à-terre tax is back.

Come January, state legislators are likely to restart discussions on taxing part-time homeowners in New York City to fill the growing budget gap, Bloomberg News reported.

The current proposal would hike property taxes by varying amounts for one- to three-family homes with market values exceeding $5 million and condos and co-ops with assessed values over $300,000. Its proponents say it could raise about $390 million annually for the state.

In October, lawmakers in Albany sent an updated proposal to committee for reviews before officially introducing it to the legislature in January. This time around — with a Democratic supermajority in both the State Senate and Assembly — the bill’s backers are more confident in its chances.

“This tax is certainly a priority for the 2021 state legislative session,” said State Sen. Brad Hoylman, the Manhattan legislator who has been the bill’s biggest proponent.

But real estate professionals have warned lawmakers that the pied-à-terre tax would further depress an already-soft luxury condo and co-op market in the city.

This time around, homeowners are joining opposition, saying that the new levy could hurt the city’s wealthy full-time residents who have more time in their second homes since March when the pandemic took hold of the city.

“So many New Yorkers with the financial means of having multiple homes are staying in their out-of-New York City homes, thinking ‘This isn’t so bad. I don’t really need to come back,’” said Stuart Saft, a real estate partner at law firm Holland & Knight who co-founded the NYC Homeowners Coalition last month. “Maybe we shouldn’t be creating an incentive for people to leave.”

Recently, executives from three of New York City’s biggest brokerages — Douglas Elliman, Brown Harris Stevens and Corcoran — formed a lobbying group whose priorities include stopping the pied-à-terre tax from passing.

“Taxing like this, it’s biting off your nose to spite your face,” Scott Durkin, Elliman’s president and chief operating officer, recently told The Real Deal. “We had to act as a group.”

[Bloomberg News] — Akiko Matsuda


Related Articles

arrow_forward_ios
Michael Flavin (Illustration by Kevin Cifuentes for The Real Deal with Getty Images)
Real estate broker Michael Flavin sentenced in fraud scheme
Real estate broker Michael Flavin sentenced in fraud scheme
Silver Lining Ranch in Aspen (Redfin, Illustration by The Real Deal)
Aspen Mansion sells for a steep $69M
Aspen Mansion sells for a steep $69M
145 Reade Street (Illustration by Kevin Cifuentes for The Real Deal with Getty Images, Zillow)
Real estate investor lists Tribeca townhouse for first time in 20 years
Real estate investor lists Tribeca townhouse for first time in 20 years
Corcoran's David Mayer and Compass' Augusto Bittencourt (Corcoran, Compass, Getty)
Foreign investors shift real estate strategies as dollar strengthens
Foreign investors shift real estate strategies as dollar strengthens
Ron Burkle and 704 Broadway (Modlin Group, Hugoatyugo/CC BY-SA 3.0/via Wikimedia Commons)
Billionaire Ron Burkle selling Noho penthouse
Billionaire Ron Burkle selling Noho penthouse
Tim Foley (Anywhere, Getty Images)
Anywhere Real Estate’s Tim Foley resigns
Anywhere Real Estate’s Tim Foley resigns
Suburbanites with pitchforks as two hands ripping building plans
Suburban Nimbys oppose more housing. Do they have a point?
Suburban Nimbys oppose more housing. Do they have a point?
Gale Brewer (Getty, Gale Brewer)
City takes aim at landlords’ empty retail space
City takes aim at landlords’ empty retail space
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...