If Mayor Bill de Blasio pursues the Fiscal Policy Institute’s recommendation for higher taxes on ultraluxury apartments owned by foreigners, he’ll need Albany to do it. And Sen. Brad Hoylman has just the bill.
On Monday, the institute recommended raising taxes on apartments worth more than $5 million owned by noncity residents. An annual surcharge of 0.5% to 4% would raise $665 million a year for the city. The left-leaning think tank says wealthy foreign buyers, often shielded by limited-liability corporations, have been buying up property in Manhattan as vacation homes but pay no income taxes and low property taxes thanks to exemptions and the city’s outdated tax code. It points to a report by the Independent Budget Office that found that in some of the newer residential developments in Manhattan, the portion of pieds-à-terre could approach 50%.
Mr. de Blasio, who earlier this year failed to persuade Gov. Andrew Cuomo to allow him to raise taxes on wealthy city residents to pay for universal prekindergarten, says he is reviewing the proposal. But if Democrats win control of the state Senate in November, the issue could require his attention when the state legislative session begins in January.
Mr. Hoylman, a Manhattan Democrat, plans to introduce a bill Tuesday that would essentially accomplish what the think tank recommended.
Ultrarich property owners from beyond New York "aren't paying income taxes, and are utilizing city services, everything from our infrastructure to our police force, and aren't contributing," said Mr. Hoylman, who noted that several such properties, including 15 Central Park West and several high-rises on 57th Street, are in his district.
"A lot of these individuals are using New York as a tax haven," he added.
The bill would "bring New York in line" with other global cities that have similar surcharges, he said, citing London as one. "This isn't viewed as punitive."