New York State Officials Revive Plans to Tax Second Homes in NYC
State lawmakers are quietly reviving plans for an annual tax on second homes in New York City.
The reach for revenue goes beyond the rarefied condo towers of Manhattan’s Billionaire’s Row, with different taxing methods for every category of homes owned by part-time residents across the boroughs. And it comes as more New Yorkers are temporarily living elsewhere, a feature of pandemic life that may continue even as the public-health crisis subsides.
Democratic legislators updated their long-running proposal for a New York City “pied-a-terre tax” in October and sent it to committee for review before an official introduction in January. With a veto-proof majority now in both the state senate and assembly, Democrats are pushing again for a levy that could raise about $390 million annually, according to Senator Brad Hoylman, a sponsor of the measure.
The tax proposal is being revived as city officials search for ways to plug a projected $3.75 billion budget gap for the next fiscal year.
The revised plan seeks to impose a yearly tax of 10% to 13.5% on condos and co-ops that are used as a secondary residence and have an assessed value of at least $300,000. That, according to Hoylman, translates into a market value of at least $5 million. One- to three-family homes in that price range also would be taxed, at a rate of 0.5% to 4% on their market value above $5 million.
But that’s just another burden on owners who would have to shoulder the costs of proving their exemption, according to Saft. Because of the vagaries of the city’s methods, an assessed value of $300,000 would, in some neighborhoods, capture homes with a market value of as little as $2 million, meaning more people will be tasked with making tax appeals to the city, he said.
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