New Taxes Cooled London’s Housing Market. Could That Happen in New York?
New York Governor Kathy Hochul's proposed yearly surcharge on second homes worth $5 million or more could hurt the city's housing market, similar to London's experience with punishing taxes. London's luxury housing market has seen a 20% drop in sales prices since 2015, with average monthly rents now at record highs.
New York Governor Kathy Hochul has proposed a yearly surcharge on second homes in New York City worth $5 million or more. The tax, also known as the pied-à-terre tax, aims to bring in $500 million a year to help address the city's estimated $5.4 billion deficit. Economists and real estate agents warn that the tax could be catastrophic for the city's housing market, citing London's experience with similar taxes. London's luxury housing market has seen a 20% drop in sales prices since 2015, with international buyers driven away and average monthly rents at record highs. The proposal's details are still fuzzy, but it could apply different tax rates to second homes based on their assessed values. Detractors argue that the proposal fails to account for the significant property tax dollars already brought in by second homes.
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