Pied-à-Terre Tax Key Articles

Crain's - Op-Ed: Pied-à-terre tax would be costly for New York - These part-time residents contribute mightily to the city’s tax base and use far fewer municipal services than full-timers (and rarely utilize expensive services such as schools and social programs)...This is an international city that has benefited greatly from part-time residents who, when they come, spend a considerable amount of money on goods and services here. When they get their steep pied-à-terre bill, some elected officials would have you believe, these part-time New Yorkers will simply say thank you very much and pay it. But this is a recurring and backward-looking property tax. Some owners would see their tax bill suddenly rise by 500% or more. Why would they keep an apartment in the city? My prediction is that many would not. – By William Zeckendorf

Wall Street Journal: New York Leaders Retreat From Annual Tax on High-Priced Second Homes - New York Gov. Andrew Cuomo and state legislative leaders are backing away from a plan to impose an annual pied-à-terre tax on mansions and apartments owned by non-New York City residents, after industry leaders warned that it could disrupt the already weak luxury real-estate market. Instead, lawmakers are moving toward a broader, one-time transfer tax on all high-ticket real-estate sales, which the industry said would be less damaging to the market. A transfer tax is a one-time tax usually set as a percentage of a property’s sale price...The real-estate industry said it supported raising taxes for transportation but that an annual pied-à-terre tax would undermine property values. “We are acutely aware of the dire need for a dedicated revenue stream to fund mass transit,” said John Banks, president of the Real Estate Board of New York, an industry group. – By Josh Barbanel and Jimmy Vielkind

Daily News - Op-Ed: Against a pied-a-terre tax - The fact is, any revenue stream that depends entirely on the real estate marketplace is unreliable, volatile and not the solution needed to improve our failing infrastructure, build fair housing and create more jobs for all New Yorkers. We need to address these pressing issues — along with property tax reform — with a comprehensive approach, not a tax that targets all New Yorkers. Yes, all New Yorkers. – By Elizabeth Ann Stribling-Kivlan

Wall Street Journal: New Tax Could Hurt Value of Some of New York’s Most Expensive Homes - The tax plan, if enacted, would levy the biggest tax on a small number of houses, co-ops and condos with market values of $25 million or more, a Wall Street Journal analysis shows. The imposition of a new annual tax on them could potentially cut the value of these properties by nearly half, the analysis found...The real-estate industry and some individual owners have been furiously lobbying against the plan. The industry has floated a proposal to drop the annual tax in favor of a one-time transfer tax imposed on expensive apartments, several industry figures said. – By Josh Barbanel

New York Post - Editorial: Naked politics is driving Albany Democrats - Democrats, now in full control of state government, revealed their top priority this week: rank politics — consequences be damned. That’s clear from two proposals in the Legislature’s one-house budget bills: one to extend “prevailing wage” laws to private construction projects that get public incentives; the other to create a “pied-à-terre” tax in the city. Both spell trouble. –By the Post Editorial Board

NY1 - Inside City Hall: The Argument Against a Pied-à-Terre Tax - Kathryn Wylde of the Partnership for New York City and former city Finance Commissioner Martha Stark argue against a pied-à-terre tax.

Crain's: Real estate execs argue pied-à-terre tax would bring in less than what supporters claim - Property and development executives think advocates for a pied-à-terre tax are starting off on the wrong foot. An analysis shared with Crain's asserts that a new excise on nonprimary residences worth more than $5 million would reap just $372 million per year—far less than the $665 million estimate. – By Will Bredderman

Wall Street Journal: Real-Estate Industry Blasts ‘Pied-à-Terre’ Tax on High-Value Second Homes - The New York real-estate industry is launching a frontal assault against a plan in Albany to impose a stiff annual tax on wealthy owners of part-time homes in New York City, warning it could topple an already weak housing market. Some in the industry also maintain that the new tax would raise far less money than the government is projecting. John Banks, president of the industry lobbying group the Real Estate Board of New York, said it was a “bad tax that has no analysis behind it” that could have ripple effects in the city’s economy. – By Josh Barbanel

New York Times: How a $238 Million Penthouse Turned a Long-Shot Tax on the Rich Into Reality - John H. Banks, president of the Real Estate Board of New York, the powerful trade group, said that “nobody has done any analytics as to the impact on the broader economy” as well as the local real-estate market. “We are very concerned it’s going to have a huge chilling effect on high-end co-ops and condos,” Mr. Banks said in an interview on Tuesday, adding that he’d been taking calls from concerned members all week. – By Jesse McKinley and Jeffrey C. Mays

Bloomberg: New York Considers Taxing Non-Resident Owners of Luxury Apartments - The proposal has been opposed by the Real Estate Board of New York, the trade group for an industry that accounts for more than 30 percent of the city’s tax revenue. The board has said it would harm the city’s economy by suppressing investment, cutting jobs and lowering demand for high-priced apartment towers. – By Henry Goldman

Politico: Pied-a-terre tax would force overhaul of how city values certain homes - New York City would need to overhaul the way it values homes if a pied-a-terre tax is passed in its current form, forcing the city to rethink the peculiar and often inequitable way it currently assesses certain types of properties. A bill sponsored by state Sen. Brad Hoylman would establish a new tax starting at 0.5 percent of the price of condos and co-ops valued at more than $5 million. And while the proposal has amassed political momentum in Albany as a way to fund repairs to the transit system, there is one glaring issue: City Hall lacks a mechanism to carry it out. – By Joe Anuta

GlobeSt: Why REBNY Opposes Pied-à-Terre Tax - The Real Estate Board of New York president John H. Banks said his trade association will continue to reach out to the senate and assembly leadership, individual members and the governor to try to stop the tax. Speaking to journalists at REBNY’s spring luncheon, Banks said, “First and foremost we dispute the amount of revenue that is going to be generated from it.” REBNY’s analysis suggests the pied-à-terre tax would raise about $350 million, less than half the amount of revenue calculated by the comptroller and the Fiscal Policy Institute. – By Betsy Kim

Connect: REBNY Blasts Proposed Pied-a-Terre Tax - The Real Estate Board of New York is opposing a proposed new state-level tax on wealthy owners of part-time homes in the city, warning that tax collections would slip if the bill were enacted. REBNY president John Banks told the Wall Street Journal the so-called pied-a-terre tax was a “bad tax that has no analysis behind it.” He said that if wealthy foreigners stay away from the city, it could cut into revenues of local businesses ranging from restaurants to taxis, and hurt apartment values. Condo and co-op sales fell 12% last year. – By Paul Bubny

The Real Deal: Pied-à-terre tax would go “a long way toward killing the market,” resi brokerage execs warn - With momentum building for a pied-à-terre tax in the upcoming state budget, the city’s residential brokerage chiefs are warning that the fee on second homes would harm an already-shaky luxury market. In particular, they predicted that the tax would have a chilling effect on the new development market, which has attracted a disproportionate number of investors and second-home buyers, including foreign buyers… “I can’t think of a better way to throw a huge wet blanket over an industry than to do all these things at once,” said John Banks, president of the Real Estate Board of New York. “It’s easy right now to vilify out of state owners of high-end real estate.” – By E.B. Solomont

Curbed: As pied-à-terre tax gains steam, NYC real estate industry pushes back - As the deadline for a new state budget looms in Albany, one formerly stalled piece of legislation—the pied-à-terre tax, to be levied on second homes in NYC valued at $5 million or higher—is gaining steam, with support from both state and city legislators. But New York’s powerful real estate industry is now flexing its muscle over the tariff, according to the Wall Street Journal, which could change the proposal’s fate. And the Citizens Budget Commission, an independent fiscal watchdog group, recently called the proposal “appealing but problematic” in a blog post, noting that it’s “not a substitute for real property tax reform that increases equity.” – By Amy Plitt

Bisnow: 'This Will Kill Demand': CRE Players Fear Pied-À-Terre Tax Would Break NYC's Residential Market - The pied-à-terre tax, as it is known, would put an annual tax on homes worth north of $5M that are not the owner's primary residence. The proposal has widespread support in Albany, and its advocates say it will generate hundreds of millions of dollars to fix the city’s crumbling infrastructure… The industry’s peak lobby group, the Real Estate Board of New York, has spoken out against the plan, and vowed to continue to advocate against it for the next two weeks. “This is not something that is well thought-out and put before the public for months to chew on and analyze,” REBNY President John Banks told reporters at his group's spring luncheon Tuesday. "This came on the table when the revenue for the marijuana legalization fell off the table and they needed to fill a hole in the budget. So they grabbed onto the pied-à-terre tax.” – By Miriam Hall

Crain’s: Pied-a-Terre tax ‘appealing but problematic’ watchdog warns - A proposed pied-à-terre tax might be on solid footing politically, but its underlying logic is slipshod, a fiscally conservative advocacy group argued Wednesday. The Citizens Budget Commission sought to slow the sudden political momentum behind a proposed excise on "foot on the ground" housing—residences belonging to foreigners and Americans who live (and pay taxes) elsewhere. Gov. Andrew Cuomo's office suggested last week that such a levy might reap $9 billion for the moribund Metropolitan Transportation Authority over the next decade and Assembly Speaker Carl Heastie reiterated his chamber's support proposal at a Crain's breakfast forum days later. For what it's worth, Mayor Bill de Blasio gave it his blessing as well. Legislation in both chambers of the state Legislature calls for imposing an annual surcharge of 0.5% to 4% on the market value of residences worth $5 million or more. Hastily organized opposition including the Citizens Budget Commission and the Real Estate Board of New York has sprung up to head off passage of the tax, which is likely to be part of the state budget due April 1. – By Will Bredderman

Bloomberg: NYC Brokers Say Pied-a-Terre Tax is ‘Class Warfare’ on the Rich - High-end real estate brokers in New York worry that foreign second-home buyers are feeling under assault from all sides and may end up going elsewhere. Already wary of President Donald Trump’s anti-immigrant rhetoric, they now see a planned tax on absentee owners as a swipe from the political left. – By Prashant Gopal and Henry Goldman

Real Estate Weekly: REBNY warns mansion tax could cause more harm than good - REBNY leader John Banks is railing against a so-called Pied a Terre tax he says will hurt New York City. “We are deeply concerned that this so-called pied a terre tax would be harmful for New York and could become law without any research or study regarding its economic impact,” said Banks in his weekly column in Real Estate Weekly. The tax would be applied to non-primary homes worth $5 million more the tax and is meant to target out-of-town residents by instituting a graduated tax starting at .5 percent and going as high as 4 percent. The state bill is backed by the city council who showed support for the bill by passing a resolution in support of the initiative last month. – By James Pero

Town & Village: Council pushing pied-à-terre tax - A few weeks after an out-of-state hedge fund billionaire purchased a $238 million penthouse apartment on Central Park South, two City Council members have introduced a resolution in support of a pied-à-terre tax. However, the Real Estate Board of New York says the tax would hurt, rather than help the city. “New York City has one of the highest transaction tax costs in the country,” said John Banks, REBNY president. “An additional tax like the one proposed will suppress sales activity and lead to lower tax revenue for the city.” – By Sabina Mallot

Gothamist: Calls To Tax Rich People's Second Homes In NYC Grow Louder - Capitalizing on public outrage over a billionaire’s purchase of a $238 million Manhattan penthouse as a part-time pad last month, City Council members are urging the state to pass a pied-à-terre tax, which would levy annual fees on secondary homes worth $5 million and up. Council members Mark Levine and Margaret Chin on Monday said they planned to introduce a council resolution supporting a state bill that was originally introduced by State Senator Brad Hoylman in 2014… Reached for comment, John Banks, the president of the Real Estate Board of New York, issued the following statement: "New York City has one of the highest transaction tax costs in the country. An additional tax like the one proposed will suppress sales activity and lead to lower tax revenue for the city." – By Elizabeth Kim