How a $238 Million Penthouse Turned a Long-Shot Tax on the Rich Into Reality

March 13, 2019. This article discusses advocates urging New York State to implement a pied-à-terre tax, which would be the United State’s first tax on superluxury second homes, or more specifically second homes that cost more than $5 million. The author highlights the sale of a New York City building with penthouses that was sold for $238 million, which is the most expensive residential sale in the United States. The article notes that both houses of the New York State Legislature and Governor Cuomo support the proposal for this tax and that advocates argue that it will bring in needed revenue to fix issues such as the subway system and help fix property taxes in New York. Advocates in opposition to this tax argue that it will encourage real-estate speculation, inflate property values and speed up gentrification.

The road to the nation’s first tax on superluxury second homes may well have begun at 220 Central Park South, where a four-story, 24,000 square-foot penthouse, unfinished and unfurnished, recently sold for $238 million.

That deal — the most expensive residential sale in United States history — seemingly set the stage for New York’s sudden embrace of a so-called pied-à-terre tax, a potential windfall for the city’s subway system and a small, subtle victory for those who believe Manhattan has become an unfettered playground for the rich.

If the measure is passed and signed into law, New York would join cosmopolitan hubs like Paris, Singapore and Vancouver, which already charge fees on secondary or part-time homes. It would also be a prime example of how headlines and hard times can sometimes intersect with a political moment, giving an outre idea a chance to become policy.

For early-adopters of such taxes, the increasing interest and new legislative traction has been satisfying. “It’s like a fine wine,” said Ron Deutsch, executive director of Fiscal Policy Institute, the left-leaning think tank which offered a white paper on the idea in 2014. “Sometimes it takes a little time.”

Click here for The New York Times.

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