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Pied-à-terre tax gains City Council support with new resolution

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A record-breaking $238 million sale has galvanized support for the “oligarch tax”

220 Central Park South as seen from Central Park
220 Central Park South where hedge fund tycoon Ken Griffin bought a penthouse for a record-breaking $238 million.
Vornado Realty Trust

City Council members are leveraging ire over billionaire Ken Griffin’s purchase of a $238 million Central Park South penthouse to galvanize support for a stalled state bill aimed at creating a new tax on part-time New York residents, also known as the pied-à-terre tax.

Council members Mark Levine and Margaret Chin, who respectively represent the Upper West Side and Lower Manhattan, plan to introduce a council resolution in support of the tax, which was first introduced by State Senator Brad Hoylman in 2014. The legislation aims to impose an annual tax on the upper echelon of pieds-à-terre—those valued at $5 million or higher. It could rake in some $650 million per year for city coffers, according to city Comptroller Scott Stringer.

“It’s simply not right that we are forgoing this revenue from people who can well afford it at a time when our city has such pressing revenue needs on so many fronts,” fumed Council member Mark Levine at a Monday news conference on the steps of City Hall. “We want to show that there is broad political support for this basic measure of fairness.”

The council resolution comes after news of Griffin’s purchase—which is the most expensive apartment in not just New York City, but the country—unleashed a barrage of outrage over the exorbitant sale. Griffin reportedly bought the nine-figure unit “as a place to stay when he’s in town,” his spokesperson told the Wall Street Journal. A chorus of city and state officials were quick to pounce on the astronomical purchase as the opening they needed to reintroduce the pied-à-terre tax.

The proposed tax is not huge; it would start at 0.5 percent on those $5 million homes, with rates rising as home values do. It also calls for an extra $370,000 fee for homes of $25 million or more. That tax revenue would then go toward funding essential city services, according to Hoylman.

“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,” said Hoylman, who has re-introduced the bill this legislative session. “It’s not just our firefighters and our police that make this city safer it’s our laws, and they’re benefiting from the rule of law by knowing that their dollars are kept preserved [in New York City.]”

Griffin is worth more than $11 billion, according to Forbes, and comes in at No. 45 on that publication’s list of top 400 wealthiest Americans.

“We’re talking about the 1 percent of the 1 percent and those folks can afford to make New York a better place,” Assembly member Harvey Epstein, who supports the bill, said Monday. “If we’re going to talk about fairness and equity ... this is one step forward in being progressive—progressive taxation for those who can afford it.”

Similar taxes have been enacted in other big cities like Vancouver, which set up a tax in 2018 known as the the Empty Homes Tax. That generated $38 million and reduced the number of vacancies by 15 percent, according to Forbes. London, Paris, Hong Kong, and Sydney have also implemented some sort of tax on non-primary homes, Forbes notes.

Hoylman’s bill went nowhere when it was introduced in large part because of pushback from the real estate industry; insiders previously slammed the idea as “nothing but a bad idea.” But Hoylman has pushed back on skeptics’ claims that the tax would scare off wealthy prospective buyers from sinking millions into pricey New York apartments.

“The amount of money is so small compared to the value of the apartment that I don’t think [the tax is] going to make an appreciable difference,” Hoylman said of those mulling purchases. “And individuals who use New York City to stash their cash should pay a premium on it.”