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Fri Mar 15, 2019, 10:41 AM

NYC Brokers Say Pied-a-Terre Tax Is 'Class Warfare' on the Rich

Bloomberg

High-end real estate brokers in New York worry that foreign second-home buyers are feeling under assault from all sides and may end up going elsewhere. Already wary of President Donald Trump’s anti-immigrant rhetoric, they now see a planned tax on absentee owners as a swipe from the political left.

“The international buyer has basically gone away over the past two years,” said real estate broker Martin Eiden at Compass, who sells about $50 million of residential property a year. “There’s only so much that people will take -- they’ll either go somewhere else or they’ll just get a hotel room.”

The proposed tax would apply to properties above $5 million owned by non-residents. Governor Andrew Cuomo says the state needs it to pay for transit fixes. Mayor Bill de Blasio says the rich should pay more, especially those who pay no income taxes while full-time residents bear the costs of services that make New York City so attractive to foreigners and out-of-staters.

The tax may slow sales at the upper end of New York’s housing market, but it could also bring benefits that go beyond fixing the subway, including encouraging developers to focus on units that are more affordable to permanent residents, said Moses Gates, a vice president at the Regional Plan Association. In the long run, everyone’s property values benefit from safety, security and cultural amenities funded by full-time residents.

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Arrow 14 replies Author Time Post
Reply NYC Brokers Say Pied-a-Terre Tax Is 'Class Warfare' on the Rich (Original post)
brooklynite Mar 15 OP
DBoon Mar 15 #1
Lindsay Mar 15 #2
Tom Rinaldo Mar 15 #3
emulatorloo Mar 15 #4
reasonabletexan Mar 15 #5
BeyondGeography Mar 15 #6
Wounded Bear Mar 15 #7
SWBTATTReg Mar 15 #8
2naSalit Mar 15 #9
maxsolomon Mar 15 #10
winstars Mar 15 #14
gratuitous Mar 15 #11
getagrip_already Mar 15 #12
TheFarseer Mar 15 #13

Response to brooklynite (Original post)

Fri Mar 15, 2019, 10:42 AM

1. The rich have already declared war

We are fighting back

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Response to DBoon (Reply #1)

Fri Mar 15, 2019, 10:46 AM

2. Yup. Was gonna say:

They only call it warfare when we fight back.

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 10:48 AM

3. The only ones who "need" the buyers who would be effected by this

are the ones who directly make commissions off of sales to them. I am not troubled over a possible slow down in the sale of 5 million dollar plus residential units to part time out of state and/or foreign residents. I am troubled over the lack of affordable rental full time housing units.

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 10:49 AM

4. ...

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 10:57 AM

5. Nah.

It is progressive capitalism!

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 10:59 AM

6. That's the most refreshing story I've read all week

Thanks.

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 11:10 AM

7. But how will they launder their money...

if NYC slows down the market? I mean, one can only sell so many paintings at inflated prices, you know.

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 11:11 AM

8. If such a tax drives away potential customers so easily as they claim, then perhaps the ...

residents of NYC don't want such people like this in their city? Also, I wonder if they'll beef up current enforcement efforts since it looks like rump and ilk engaged in fraud just about everywhere, including NYC?

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 12:25 PM

9. Cry me a F'ing river! ...nt

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 12:41 PM

10. Yeah, they'll just buy a condo in the other NYC.


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Response to maxsolomon (Reply #10)

Fri Mar 15, 2019, 03:01 PM

14. Yes, that other cheaper NYC!!! LOL Or maybe in Oklahoma or West Virginia?

You know thats where all the cool cats wanna live!!!



It is a good idea to tax these places; they also take up valuable space(apartments)...


London has a similar issue...

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 12:48 PM

11. One of the brokers moves $50 million of "residential" property?

On a 6% commission basis, that means he makes $3 million a year, and Martin Eiden doesn't want to have to hustle and scramble for that little chunk of change. Have a heart!

Also, I don't think many of the high end buyers are going to care all that much. Part of the reason they buy these expensive properties that they live in for just a couple of weeks a year is so that they don't have get a hotel room. The nosy hotel employees might notice something amiss in their suites when they happen upon the domestic slaves. Having a private residence avoids the inconvenience of explaining to suspicious cops who those haggard women with the haunted eyes are.

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 12:50 PM

12. so let me understand this...

A Foriner, who is going to spend in excess of $5M for a piece of property they will neither live in nor use, will not buy that unit now, because TAX, and they then won't be able to not live in or not use it?

The humanities!

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Response to brooklynite (Original post)

Fri Mar 15, 2019, 01:00 PM

13. Oh no

Now they’ll have to invest in stocks or t-bills or something. The horror.

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