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Lawmakers Support Special Tax on Multimillion Dollar Second Homes in NYC

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There’s speculation that after Kenneth C. Griffin, the hedge fund multibillionaire, bought a Central Park South apartment for $238 million, it became a little more feasible to suggest that maybe people worth $10 billion could afford to pay a little more in taxes. Photo Credit: Wikipedia

There have been a lot of ideas floated around recently for how to fund the city’s Metropolitan Transit Authority, and it will ultimately take a variety of ideas in order to fund and fix the city’s transit agency that handles some of the bridges, tunnels, Long Island Railroad, Metro-North Railroad, Staten Island Railway, and the city’s buses and subways.

One of the potential taxes would hit those who can afford housing that costs millions of dollars and doesn’t even serve as the first home for the wealthy tenants, who oftentimes leave the spaces vacant most of the year. Albany looks ready to make the tax a reality and hopefully direct some funds to the overleveraged transit agency. State lawmakers look ready to put together legislation, especially because the governor signalled he would be on board with signing such a bill into law, which would be known as a pied-à-terre tax. Gov. Andrew Cuomo believes such a plan could work and is the “only agreed-to new money” for the state right now.

There’s speculation that after Kenneth C. Griffin, the hedge fund multibillionaire, bought a Central Park South apartment for $238 million, it became a little more feasible to suggest that maybe people worth $10 billion could afford to pay a little more in taxes so the roads, bridges, and mass transit systems that keep the cities and their businesses running can be fixed in the supposedly greatest city in the world in the country of American Exceptionalism.

“I think we have a mass transit system that is in crisis, public housing that is falling down around its residents and a yawning gap between the very wealthy and ordinary New Yorkers that is driving this conversation,” Senator Brad Hoylman said. He is one of the sponsors of the state Senate’s bill that would create the tax.

The New York Times explains why the tax makes sense in these cases and how the city is hurt right now without it. “The $238 million record purchase was a visceral reminder that when wealthy buyers like Mr. Griffin purchase expensive apartments as second homes or investments, New York City and the state get less financial benefits than if the home was owned as a primary residence. If the buyers live out of state, they are not subject to state or city income taxes, and do not pay New York sales tax while outside the state.”

The current version of the Senate bill would make sure that properties valued at over $5 million would be hit with an annual tax, the pied-à-terre tax, and it would only hit homes that are not the primary residence of the tenants.

“It is great that with a united Democratic Legislature and support from the governor, we can finally get this done,” Mike Murphy, a spokesman for the Democratic majority in the Senate said. He said there should be a tax on the “ultrarich second homeowners in New York City” because it’s “common sense and something we have supported for years.”

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