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.
How NYC’s five priciest sales WERE valued and taxed
|Rank||Address||Buyer||Sale Price||2018–2019 Assessed Value||2018–2019 Tax Bill|
|1||220 Central Park South, #50||Ken Griffin||$238M||$9.4M||$516,500*|
|2||One57, #90||Michael Dell||$100.5M||$3.5M||$164,688|
|3||One57, #75||Bill Ackman (and partners)||$91.5M||$3.9M||$186,132|
|4||432 Park Avenue, #92||432 Park Joy LLC||$91.1M||$750,622||$89,604|
|5||15 Central Park West, #PH20||Ekaterina Rybolovleva||$88M||$1.2M||$128,375|
A breakdown of the taxes on second homes and foreign buyers in other global cities
|City||Taxes on second homes|
|London||3% to 15% of sale price|
|Paris||Up to 60% of the standard property tax payment|
|Vancouver||1% of the assessed value for vacant property downtown|
|Hong Kong||15% of sale price, plus another 15% if the buyer is foreign|
|Singapore||12% for Singaporeans; 15% for permanent residents; 20% for foreigners|
|Sydney||4% tax on foreign buyers|
|Toronto||15% tax on foreign buyers|