April 3, 2019. This article discusses the disappointment that advocates expressed when the New York State 2020 fiscal year budget was passed and it did not include a pied-a-terre tax, that would have implemented a recurring tax on non-primary residences that were worth more than $5 million. The author goes on to highlight that although a pied-a-terre tax was not included, a “mansion” tax, which will implement a one-time tax on residences sold for more than $25 million and a real estate transfer fee was included. The author notes that some advocates argued that a pied-a-terre tax would cause condos to become rentals and construction would cease in New York City.
The New York state budget officially passed this weekend, and while it did include an increased “mansion” tax—a one-time sales tax on homes sold for more than $25 million—the much-buzzed about “pied-a-terre tax” was nowhere to be seen.
Talks of the tax, which would only apply to non-primary residences valued at over $5 million, resurfaced when billionaire Ken Griffin bought a $238 million Manhattan penthouse earlier this year.
The pied-a-terre tax saw backlash from the real estate community, with Pam Liebman, CEO of The Corcoran Group, telling the Wall Street Journal, “If the real-estate market suffers, everybody will suffer. The condos will become rentals. The construction trades will lose out. Nobody will build another building.”
The proposed pied-a-terre tax was predicted to raise $665 million, according to a 2014 Fiscal Policy Institute report. The Regional Plan Association estimated these added revenues would reduce local property tax bills by 3.1%.
Click here to read the full article from Forbes.