If state legislators get their way, wealthy people who own expensive second homes in the Big Apple may have to fork over more in taxes.
This past Monday, Gov. Andrew Cuomo and other Democratic leaders in Albany announced their support for what has been called a “pied-à-terre tax.” The annual tax would apply to New York City homes worth $5 million or more that are not their owners' primary residence.
How much revenue such a tax would bring in has yet to be calculated, but the office of City Comptroller Scott Stringer hypothesized that if it was enacted today, the state could raise at least $650 million each year.
The pied-à-terre tax bill has been kicking around for some time, having been introduced by State Senator Brad Hoylman in 2014. If levied, the tax would ostensibly work on a sliding scale, with homes on the lower end of the spectrum – from $5 to $6 million – accruing a 0.5 percent tax; while those at the very high end – as in those worth more than $25 million – topping out at 4 percent.
Several notable luxury real estate transactions have renewed interest in the tax, but none more so than the recent purchase of a $238 million Central Park South apartment by Kenneth Griffin, founder of investment company Citadel. Representatives of Griffin referred to the pad – which happens to be the most expensive home in the United States – as “a place to stay when he's in town.”