New York lawmakers push for new millionaires’ tax

New tax on high earners could affect real estate industry

New York Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins (Getty)
New York Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins (Getty)

New York’s real estate industry have another potential tax to worry about.

A handful of New York legislators want to match New Jersey’s move last week to increase taxes on seven-figure earners to help plug the state’s growing budget deficit, according to the Wall Street Journal.

Legislators in the Garden State agreed to raise Jersey’s tax rate to 10.75 percent from 8.97 percent for those earning between $1 million and $5 million. The move is projected to bring in another $390 million per year.

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A similar tax in New York could generate $5.28 billion annually, the Journal reported, citing statistics from the Fiscal Policy Institute, a progressive think tank.

A new millionaires’ tax is the latest proposal that could affect New York’s real estate market, especially luxury home sales and development. The state legislature is also again considering a pied-à-terre tax, which would increase property taxes on high-value second homes.

The proposed income-tax tier comes little more than a year after state lawmakers approved a one-time “mansion tax” and a hefty transfer tax on luxury properties, which was projected to create $365 million in revenue. Those taxes were an industry-pitched substitute for the proposed pied-à-terre tax as a way to fund transit projects.

Gov. Andrew Cuomo has opposed efforts to raise taxes on wealthy New Yorkers, arguing it could chase those residents out of the state. Cuomo’s budget director, Robert Mujica, noted in response to the new tax proposal that high earners in New York City already pay a combined income tax rate of 12.6 percent. Most of that is from a statewide millionaires’ tax of 8.82 percent in effect through at least 2024. [WSJ] — Keith Larsen