Rich New Yorkers’ second homes targeted in proposed ‘oligarch’ tax
Proposal comes as the state deals with a massive coronavirus-related budget deficit
New York State lawmakers are weighing whether to tack on a property tax to the bills of local part-time homeowners.
The measure under consideration by the New York State Legislature would impose a pied-a-terre, or “oligarch,” tax, primarily targeting part-time residents who aren’t subject to state income taxes.
Proposed rates would range from 10% to 13.5%, to be levied on condos and co-ops with assessed values exceeding $300,000 – or a market value of about $5 million.
Homes worth between $5 million and $6 million would be taxed at a yearly rate of 0.5%, while those valued between $6 million and $10 million would be taxed at a rate of 1% plus a fee of $5,000. The rate would gradually increase to 4% plus a $370,000 fee, for those homes valued at more than $25 million.
NEW YORK 'OLIGARCH TAX' AIMED AT WEALTHY BUYER'S SECOND HOMES
The tax was originally introduced by Democratic State Sen. Brad Holyman in 2014, but its revival in 2019 was linked to billionaire hedge fund manager Ken Griffin’s recent record-breaking purchase of a $238 million New York City apartment. Griffin is worth an estimated $10 billion and is expected to stay at the pad while he’s in town – meaning he is not subject to local or state income taxes and those financial benefits are largely lost to the city.
Grffiin's hedge fund, Citadel, has $35 million in assets under management.
"I like to call it an oligarch tax because there are foreign owners currently purchasing property in New York City—tens of millions of dollars—not contributing to city services,” Holyman has said of the tax.
Holyman has called the tax a priority for 2021, according to Bloomberg News, which first reported renewed interest in the measure.
A spokesperson for Holyman's office did not return FOX Business' request for comment.
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Consideration of the measure comes at a time when New York – like many states throughout the U.S. – is reeling from the economic impacts of the coronavirus pandemic.
The tax, however, could be particularly potent since some have left the state amid a growing remote work trend that has allowed people to leave New York.