State Senator Proposes Tax on Luxury Apartments Owned by Non-Residents

Sept. 26, 2014 — Thinking of perhaps keep a little pied-à-terre in New York, a little home-away-from-home where you can stay when you're in the Big Apple? Well, try to keep its market value below $5 million if a bill that State Senator Brad Hoylman plans to introduce goes to law. The idea, as reported by Crain's New York Business, is based on a proposal by the Fiscal Policy Institute noting that "because of the arcane nature of the City’s property tax, or because such units benefit from tax breaks mainly intended to benefit more affordable housing," non-primary residents "pay a very low effective property tax relative to the real market value of the property. Yet, the high value of their property depends on local tax dollars supporting the infrastructure and public services that contribute to the city’s quality of life and attractiveness."

The bill follows the Institute's math, which says a tax starting at 0.5 percent for the first $1 million in value over $5 million, rising to 4 percent for the value over $25 million, would generate an estimated $665 million from the 1,556 coops and condos in that price range and owned by non-primary residents. Which, if you're a Saudi or Chinese billionaire, is basically the change in your couch.