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Lawmakers in Albany are thinking of raising taxes on real estate sales in place of a planned tax on luxury second homes, according to a new report.
The proposed pied-à-terre tax would put an annual tax on homes worth upward of $5M that are not the owner's primary residence. The plan reportedly had significant support in Albany, with proponents arguing it would result in millions for the Metropolitan Transportation Authority.
But after widespread backlash from the real estate industry, state officials are now considering killing the plan, Politico reports, citing five unnamed sources. Negotiations over the plan are not yet dead, but are “headed there,” according to a Politico source. Another described the tax as too “onerous,” considering how properties are taxed in the state.
Gov. Andrew Cuomo — who has said the planned tax is to make up for the fact that legalizing marijuana did not pass — was still backing it in a radio interview Monday, per Politico, and a representative did not provide further comment to the publication.
The plan has spooked the city’s real estate industry, with developers and brokers arguing it will do far more harm than good. Some argue it will drive wealthy foreign buyers away from the already oversupplied luxury market.
The Real Estate Board of New York and other critics say the numbers the city is using are wrong. While the City Comptroller has said the tax will generate $650M in revenue, REBNY claimed it would only generate half that much.
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