Pied-à-Terre Tax killed in final budget

State Senator Brad Hoylman (center) discusses the Pied-a-Terre Tax at a February press conference. (Photo by Sabina Mollot)

By Sabina Mollot

A real estate tax bill sponsored by State Senator Brad Hoylman that had recently gotten its second wind after languishing in the capital for years has just been killed in the finalized state budget. After being fought tooth and nail by the real estate industry, what had been dubbed the Pied-à-Terre Tax was instead substituted with other tax increases.

The Pied-à-Terre tax, which would have been charged to owners of properties worth over $5 million that are not the owner’s primary residence, was besieged by accusations that it would gut the luxury market and even significantly reduce the value of impacted units.

Prior to its demise, Hoylman acknowledged all the controversy and various headlines surrounding it.

“We’re calling it the Pied-à-Scare Tactic,” he told T&V. “They’re trying every argument against it.”

Hoylman had estimated the tax, which would range from 0.5 to 4 percent of the value of the property would have earned the city $600 million a year that could be used by the MTA.

Instead, two different supplements on existing taxes replaced it in the budget, though they won’t bring in as much revenue.

The existing 1 percent tax on property sales $1 million and higher will become 1.25 percent on homes selling for $2-3 million. A 0.4 percent transfer tax will become 0.65 percent for properties over $3 million and together the expected revenue is $365 million. Property sales at $25 million would have the tax capped at 3.9 percent tax plus the transfer tax, according to the New York State Division of the Budget.

“So while the Pied-à-Terre Tax did not make it into the budget, I’m grateful we have identified high-end properties as a new source of revenue,” Hoylman said this week. “People with the greatest ability to pay should be supporting the MTA. It shouldn’t fall on the backs of the riders.”

What’s in the budget

Congestion pricing is officially going to happen, though the details have yet to be worked out by a committee with members to be appointed by the MTA Tri-Borough Bridge and Tunnel Authority.

Hoylman said efforts to exempt the FDR Drive and the West Side Highway were successful, as was a push for a refund through tax credits for Manhattanites earning under $60,000 who live within the congestion pricing “zone.” He is also pushing for exemptions for seniors and the disabled. Additionally, the committee will be considering a system for resident parking.

Other budget items include reforms on criminal justice, a ban on plastic bags with fees for paper bags at the discretion of the city, a $5.5 million budget for the Tenant Protection Unit (up 22 percent from last year) and an additional $20 million for the census count.

“It’s not everything we wanted but it’s much better than previous years,” said Hoylman, of the budget. “We now have a seat at the table and we can make our constituents heard.”

Progress on Hoylman’s other bills

Meanwhile, another real estate tax proposed by Hoylman for retail, the Vacancy Tax, has been quietly “percolating in the background,” he said.

“I’ve spoken to the city about it and we’re going to be revisiting that after the budget.”

The Vacancy Tax was initially introduced five years ago in the hopes of discouraging landlords from keeping storefront spaces empty. The bill hasn’t seen any movement in the capital lately but was included in a City Council resolution in February. It was also mentioned at a March City Council hearing of the Small Businesses Committee when the city’s Small Business Services Commissioner Gregg Bishop testified it was something the administration was pushing for.

Another piece of legislation, the robo-call prevention bill, was passed in the State Senate’s telecommunications committee after being reintroduced in Albany last week with Yuh-Line Niou as its sponsor in the Assembly. The bill, drafted last year, has since been strengthened, Hoylman said. It would now give the attorney general as well as fed-up consumers who’ve come to dread looking at their phones more power to stop the scourge of scammy calls by being able to go after the callers themselves and allow courts to issue treble damages for those ignoring the law.

Hoylman, who gets several robocalls a day himself, said, “It’s really an ongoing concern of my constituents, family members and myself. Everyone seems to get these calls and they are so disruptive and deceptive and New York needs to do something about it because it’s not getting fixed on a federal level.”

Another bill the senator recently introduced would make a publicly available liquor license database for the city. Currently, members of the public who want information surrounding an establishment’s liquor license have to get it by filing FOIL requests. Hoylman said it will go a long way in helping community boards and law enforcement agencies who need to look into the status of a business’s license.

“These are extremely important to neighbors as to whether an outdoor café should be permitted or a DJ or live music,” said Hoylman. “All of these are related to the quality of life of neighbors.”

This bill just passed in the Senate and Hoylman said he’s hopeful about support in the Assembly.

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