The “pied-à-terre” tax, part of Democratic state lawmakers’ budget proposals, would target out of state residents and some New Yorkers who buy property valued at over $5 million. Mayor Bill de Blasio and Gov. Andrew Cuomo support the tax.
State senator Brad Hoylman, a fan of socialist Alexandria Ocasio-Cortez and co-sponsor of legislation that legalized abortion in New York up until the moment of birth, originally introduced the tax in 2014.
The proposal comes at a time of lagging real estate prices. Last year, the real estate market had its worst year since the financial crisis, as sales fell by 14 percent. In 2018 the median price for an apartment in Manhattan “fell below $1 million for the first time in three years,” CNBC reported.
The pied-à-terre tax would further cause a “dramatic drop” on real estate values in New York, according to an analysis conducted by the Wall Street Journal.
The tax ranges between 0.5 percent to 4 percent on homes valued at $5 million and above. Proponents of the tax say it would raise up to $650 million in revenue per year, though the Journal‘s analysis found it would raise just $471 million.
“The tax is a disaster,” one apartment owner told the Journal. “If you actually put the tax in place, you would massively reduce the value of real estate.”
Real estate brokers told Bloomberg a pied-à-terre tax is “class warfare” on the rich.
Nah. The rich can always just leave.