Manhattan State Sen. Brad Hoylman is not backing down.
Months after a tax on second homes was shot down amid fierce opposition from the real estate industry and concerns over how it would jive with the city’s property tax system, the senator says he’s committed to making the so-called pied-à-terre tax viable.
“It’s still of great interest I think to my colleagues. I’m continuing to carry it,” he said. The bill is currently in committee and the senator hopes it will be ready to go to the floor by the start of the January session.
“I hope to have a bill that’s ready for prime time as it were,” he said.
The pied-à-terre tax is by no means a new idea. But it most recently reared its head in the spring, and was billed as a way to pay for upgrades to New York City’s public transit. It was proposed as an annual levy on properties valued at $5 million or more at a sliding rate beginning at 0.5 percent and rising to 4 percent on homes valued at $25 million and above.
Billionaire Ken Griffin’s record-smashing purchase of a $238 million penthouse at 220 Central Park South this year has been pointed to — by both the bill’s supporters and critics — as the harbinger of pied-à-terre tax. Griffin’s condo was assessed after its sale at a value of just $9.4 million, which meant his property taxes are about $516,000 a year.
Gov. Andrew Cuomo backed the bill as part of balancing the state’s budget, with its proponents claiming the new tax would bring in more than $600 million. The proposal immediately raised the ire of brokerage leaders, developers and agents, who claimed it would hurt the already-struggling luxury residential market.
Days before the budget deadline, the pied-à-terre tax was canned after issues regarding the taxes implementation proved too “onerous.” In its place, legislators decided to introduce a new series of progressive closing taxes, which ultimately led to a record amount of residential property sales in June, ahead of its implementation.
But that hasn’t deterred Hoylman, who first introduced the pied-à-terre tax proposal in 2014. He said in an interview with The Real Deal that he’s working through the “technical aspects” that killed the bill in the spring and seeking “buy-in” from his party’s leadership on strategy at the Democratic Conference later this fall. He declined to comment on whether he’s sought input or is planning to hold any kind of town hall with the real estate industry.
Hoylman said the bill, if it advances, could represent an option for raising revenue for initiatives like constructing affordable housing or education. The latter has already caught the eye of the chair of the Cities Committee, which is considering the bill now. The chair, Manhattan State Sen. Robert Jackson, said in a statement to TRD that the tax “presents a perfect opportunity to increase funding to public education.”
“I think the overall issue is that a lot of New Yorkers believe a lot of nonresident wealthy owners of condos… aren’t paying their fair share,” said Hoylman. “I and many of my colleagues think there should be a premium on that investment.”