Taxing the top

Fueled by concerns that wealthy homeowners are not paying their fair share, a so-called pied-à-terre tax was floated last year before being shot down amid fierce opposition from the real estate industry.

Current tax law requires co-ops
and condos to be assessed as if they were rental properties, a scenario that’s resulted in the “severe and persistent undervaluation” of some of the priciest apartments, the Furman Center said in a 2013 policy brief. Last year, the city’s Independent Budget Office — a nonpartisan organization that provides information about the city’s budget and tax revenue — estimated that co-ops and condos were undervalued by 20 percent compared to their true market value.

Take Ken Griffin’s apartment at 220 Central Park South: Even after it sold for a record-breaking $238 million, it was assessed at just $9.4 million, with annual taxes of around $516,000.

And it’s hardly an outlier. Michael Dell’s penthouse at One57 — which he purchased for $100.5 million in 2014 — had an assessed value of only $3.5 million, according city tax records. Based on that value, his taxes would clock in at $164,688 in 2018-2019. Another penthouse at One57 — purchased by Bill Ackman for $91.5 million in 2015 — had an assessed value of only $3.9 million, making his 2018-2019 tax bill $186,132. 

Gov. Andrew Cuomo
Gov. Andrew Cuomo
Bill Ackman Pershing Square Capital Management
Bill Ackman
Pershing Square Capital Management

How NYC’s five priciest sales WERE valued and taxed

RankAddressBuyerSale Price2018–2019 Assessed Value2018–2019 Tax Bill
1220 Central Park South, #50Ken Griffin$238M$9.4M$516,500*
2One57, #90Michael Dell$100.5M$3.5M$164,688
3One57, #75Bill Ackman (and partners)$91.5M$3.9M$186,132
4432 Park Avenue, #92432 Park Joy LLC$91.1M$750,622$89,604
515 Central Park West, #PH20Ekaterina Rybolovleva$88M$1.2M$128,375
Source: TRD analysis of NYC Department of Finance records and published reports. *2019-2020 tax bill.

A breakdown of the taxes on second homes and foreign buyers in other global cities

CityTaxes on second homes
London3% to 15% of sale price
ParisUp to 60% of the standard property tax payment
Vancouver1% of the assessed value for vacant property downtown
Hong Kong15% of sale price, plus another 15% if the buyer is foreign
Singapore12% for Singaporeans; 15% for permanent residents; 20% for foreigners
Sydney4% tax on foreign buyers
Toronto15% tax on foreign buyers
Source: Knight Frank and published reports