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