New York's proposed pied-a-terre tax

The tax would be levied on homes that are not registered as primary residences and have a value that is greater than five million dollars.

Each and every week, Mansion Global goes to real estate tax attorneys and asks them a question about taxes. Take a look at the question for this week.

Who would be impacted by the most recent pied-a-terre tax proposal in New York City, and what is the idea itself?

A. The New York State Legislature is now debating whether or not to impose a pied-à-terre tax, which would have an impact on the real estate market in cities with populations of more than one million people.

In accordance with the plan, the tax would be imposed on properties with one, two, or three bedrooms that are not the primary residence of the owner and that have a value that is greater than five million dollars. The market value that is greater than $5 million would be subject to a rate that ranges from 0.5 percent to 4 percent.

In addition, condominiums or cooperatives that have an assessed value of $300,000 or more would be subject to a tax rate that ranges from 10% to 13.5% on the portion of the assessed value that is greater than $300,000. The amount that is less than $300,000 would not be subject to taxation.

Additional Information: What Is the Land Preservation Tax in the Hamptons of New York?

According to Peter Zinkovetsky, an attorney with the Zinkovetsky Law Firm in New York City, the tax would not be applicable to properties that are rented out on a full-time basis or those are lived by a child or parent of the owner.

Senator Brad Hoylman, a Democrat from New York State, was the one who initially proposed the idea in 2014. This proposal would have the most significant effect on New York City. There have been five legislative sessions in which different versions of the pied-a-terre tax have been proposed, and it is currently being considered for the fiscal year 2021-22.

“The primary reason that it has been brought back to life is because there is a significant gap in the budget,” Mr. Zinkovetsky explained.

In point of fact, the pandemic caused by the COVID-19 virus has resulted in financial deficits across the state and the city. According to Mr. Hoylman, the pied-à-terre tax has the potential to assist in filling the gap without compromising the quality of services.

Christie’s will be offering the collection of Kathleen Ford, who was the widow of Henry Ford II. This coming from Penta.

“New York is facing the worst economic crisis in a generation,” the senator stated in an email addressed to the state’s governor. “I am concerned that budget deficits are going to have a tremendously destructive impact on our social safety net, public schools, the health care system, and mass transit,” the speaker said. The state of New York must ensure that every progressive method of income generation, including the pied-a-terre tax, is kept ready for consideration.

According to Mr. Hoylman, the Independent Budget Office of New York City estimates that the proposal to tax luxury second and third houses will provide a minimum of $232 million in annual revenue.

There has been no announcement regarding a schedule for the bill’s progression, and it is now being considered by committee. In the past, Governor Andrew Cuomo has not shown his support for the law; however, he has indicated that he may show his support for the effort in the future due to the budgetary challenges experienced by the state.

New York’s proposed pied-a-terre tax

By ki0nk

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