Pied-a-Terre Tax Could Soon Hit the Absent Rich

A month after hedge fund multi-billionaire Ken Griffin added a $238 million Central Park South condo to his portfolio of very expensive homes, two New York City Council members are getting ready to introduce a resolution calling for the state to create a pied-à-terre tax on non-primary residences in New York City, Crain’s reports.

The resolution by Manhattan Democrats Margaret Chin and Mark Levine supports state legislation first introduced by Senator Brad Hoylman and Assemblywoman Deborah Glick in 2014, legislation that languished when Republicans controlled Albany but received renewed interest when Democrats took over this year. The bill would apply an annual surcharge to homes in the city that are not primary residences and are worth more than $5 million. A tax between 0.5 percent and 4 percent of the property's value would be charged. Under Hoylman's bill, Griffin would have to pay an additional $8.9 million in taxes annually. 

"There are owners and part-time residents who are benefiting from a whole list of services, like police and fire, but they are not contributing a penny of income tax to our services," Levine says. 

A resolution is an expression of the council's opinion, not a law. It is not clear how much influence the Chin-Levine resolution – if it passes – would have on the state legislature. 

Pieds-à-terre have long been an issue for the city. The most recent New York City housing and vacancy survey found that the number of infrequently used residences jumped from 55,000 in 2014 to 75,000 in 2017. According to the Fiscal Policy Institute, the proposed tax would generate an estimated $665 million annually from co-ops and condos. It faces opposition from the real estate industry.