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The Tax-the-Rich Horse Race Goes Down to the Wire

New York City

Transfer Tax
March 29, 2019

In the horse race of ideas on how to tax the absentee rich to pay for repairs to New York’s broken subways, a dark-horse transfer tax appears to be gaining on the front-running pied-a-terre tax as state-budget makers near the finish line of April 1. 

Lawmakers are reviewing a transfer tax starting on property sales of $3 million or possibly less, with the rate increasing for sales of $5 million, Crain’s reports. Assembly Speaker Carl Heastie says the transfer tax could raise between $300 million and $400 million a year. The Bronx Democrat adds that the transfer tax could help avoid the "chicanery" of owners trying to dodge the pied-à-terre tax: "It's just not as easy to play games if you do a real-estate transfer tax." 

“You could do it a number of ways," Governor Andrew Cuomo tells WNYC's The Capitol Pressroom. "It could be a transfer tax, it could be an annual tax. We need the tax. I think it's justifiable. It would go to the MTA, it would be in a lock box." 

The real estate industry has spent the past few weeks warning the pied-à-terre tax would damage an already struggling luxury real estate market in the city. Luxury brokers have dubbed the idea “class warfare.” 

State Sen. Brad Hoylman, who originally proposed a pied-a-terre tax on properties worth $5 million or more purchased as a second (or third or fourth home), questioned if the legislature is here "to protect people who already have every advantage? Ken Griffin, who bought the $238 million second home in New York, has a net worth of $11.6 billion. Something tells me that he could afford a pied-a-terre tax. Are we really debating whether this is going to have too much of an impact on people with such enormous wealth?"

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