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

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?"