BY GABE HERMAN | As lawmakers in Albany are working to shape the budget for the 2019-20 fiscal year, state Senator Brad Hoylman’s pied-a-terre tax has been included in a Senate budget resolution.
Hoylman, whose district includes the Village, part of the East Village, Stuyvesant Town and much of Midtown, has been pushing for the tax since 2014. If approved, the measure would charge people with expensive homes that are not used as a primary residence.
The tax would raise an estimated $650 million annually for the city. It would apply to residences worth more than $5 million. Fees and rates would be charged on an increasing scale as properties increase in value.
For apartments valued at between $5 million and $6 million, there would be a 0.5 percent tax on the value above $5 million. The highest rate would be for properties worth more than $25 million, which would be charged a fee of $370,000, plus a 4 percent tax for all value after the $25 million.
The budget resolution would fund programs for at-risk New Yorkers, including for homeless and runaway youth and people facing foreclosure.
“The inclusion of my pied-a-terre tax in the Senate budget — which I’ve been fighting to pass with Assemblymember [Deborah] Glick since 2014 — would provide critical new revenue to sustain New York City’s infrastructure,” Hoylman said. “It is not unreasonable to ask those who can afford to buy a $238 million second home in New York to pay a little more to keep our subways and schools running.”
Momentum for a pied-a-terre tax has picked up rapidly since January, when hedge-fund billionaire Ken Griffin bought a $238 million penthouse at 220 Central Park South. It was the largest home purchase in U.S. history. Griffin is the richest man in Illinois and said he would use the Midtown penthouse when he was in town.
Since then, city councilmembers have called for a tax at the city level, including Margaret Chin and Mark Levine.
On Jan. 25, City Council Speaker Corey Johnson tweeted about the $238 million penthouse sale, “Enough. It’s time for a pied-a-terre tax. We should tax luxury non-primary residences, like this one likely will be.”
Earlier in March, Governor Andrew Cuomo said he supported a pied-a-terre tax as a way to help fund the Metropolitan Transportation Authority and improve the city’s subway system.
Hoylman said the tax being included in the budget resolution reflects the state Senate’s having turned blue as a result of the last election.
“With a new Democratic majority comes new priorities,” he said. “Under the leadership of Senate Majority Leader Andrea Stewart-Cousins, we’ve advanced a budget that fights for the needs of all New Yorkers — not just the wealthiest 1 percent.”