5 ms·

Reactionary taxes like this have a tendency to be ill-considered and have unintended side effects. NY also has a 1% penalty on paying more than $1 million for

Reactionary taxes like this have a tendency to be ill-considered and have unintended side effects. NY also has a 1% penalty on paying more than $1 million for housing, which was probably enacted to proletariat applause when $1 million was still considered a lot of money. Now it distorts the value of entry level housing in NYC, where you'll have a hard time finding anything more than a studio apartment for $1 million. High closing costs and similar distortions mean people tend to lose money on housing in NYC unless it's held for many years. $5 million is expensive enough that this probably won't add much housing stock in the short term. Still, politicians never seem to think through the consequences of headline-grabbing tax policies.

braiamp 5mo ago
Even in worse case scenario, which this isn't, the affected persons would at most try to cheat the system. This proposal is really narrow to non-primary residences, that are also very valuable. None of which will affect 99.999% of the population.
saulpw 5mo ago
Gosh, 1% on $1m, that's almost $10k! I can see that how would discourage homeownership and distort the market. Actually wait, I can't.
- wan23 5mo ago
  You're comparing the wrong numbers. The question is what 1% of the purchase price does to the amount you need for your down payment and fees. On a 10% down payment an extra 1% increases the amount you need by 10%. Remember that while a million dollar home sounds extravagant, it's first time buyers who often have just barely enough who are trying to buy these.
  - rootusrootus 5mo ago
    > On a 10% down payment an extra 1% increases the amount you need by 10% Because you are not allowed to roll that tax into the loan?
    - saulpw 5mo ago
      That seems to be the case, though there are other tricks (like raising the sale price and getting the seller to pay the tax).
- zeroonetwothree 5mo ago
  “almost”?
webdood90 5mo ago
Who are you protecting here? You realize a very small subset of the population can afford a million dollar home, let alone a five million dollar home? The majority of the city does not give a shit.
- giantg2 5mo ago
  "The majority of the city does not give a shit." Based on the voting, it seems they do give a shit but in the opposite direction.
smallmancontrov 5mo ago
Golly gee willikers, not the spooky potential for possible side effects! Wouldn't want any of those when we could have gigantic sucker-punch scarcity-amid-plenty instead!
- nh23423fefe 5mo ago
  my neighbors have so much they don't deserve, how can i steal their property!
  - cybercatgurrl 5mo ago
    meanwhile they’re scheming against you to see how much you’re willing to pay before you can’t afford to eat anymore just to buy that extra home. it’s an absolutely beautiful thing. they deserve it all and rightfully so!
  - array_key_first 5mo ago
    Taxes = theft is one of the most tired, low-brow, and intellectually lazy viewpoints ever. We all understand the concept of commons. We all understand the concept of money pooling. Don't pretend it doesn't make sense or it's evil when most people pay for private insurance anyway or even fucking Claude Code subscription plans which follow the same concept.
8note 5mo ago
> people tend to lose money on housing in NYC unless it's held for many years. I'd generally consider that a success metric? People making money flipping houses on short terms is a bad thing
- bsimpson 5mo ago
  What's a reasonable time horizon? What should happen when you find a mate and need more space than you did when you moved into your current unit? A friend moved out of his space after 7 years to start a family, and the appreciation didn't cover the closing costs.
  - bdangubic 5mo ago
    they way to “handle” this is to stop viewing housing as “investment” - especially short-term investment. once you do that, you are good. when you buy you will consider all the implications of that decision and then you can live with it when you need different housing
    - chii 5mo ago
      > stop viewing housing as “investment” whether something is an investment or not is not a subjective opinion, but an objective fact. If it takes effort, capital and time/labour to create, it's an investment, because such resources have alternative uses. Just because this cost have been paid as a lump sum in the past (for constructing a building and/or buying the land etc), doesn't mean that cost is now sunk and is "lost" - it is, and must be, recouped in the future, otherwise the initial cost will not make sense to have been spent, and said investment would not be made and the world would now have one less of it.
      - barnabee 5mo ago
        Now do cars and food… There’s no reason that the cost of something you need “must be recouped” in future by you having and using that thing.
gib444 5mo ago
> ...when $1 million was still considered a lot of money They knew exactly what they were doing by not indexing it.
thrance 5mo ago
I'll hit you with a big: source? This kind of talking point is reiterated ad nauseam, but never justified or backed by any empirical research. I'll state one simple thing: if America is unable to raise taxes on second homes over $5M in Manhattan by 1% then this country is well and utterly fucked. The 1% are paying less taxes than anyone else in this country while hoarding the majority of the wealth. Homelessness is skyrocketing, debt levels are through the roof, but god forbid we raise the tax on second homes over $5M by 1%.

braiamp 5mo ago

Even in worse case scenario, which this isn't, the affected persons would at most try to cheat the system. This proposal is really narrow to non-primary residences, that are also very valuable. None of which will affect 99.999% of the population.

saulpw 5mo ago

Gosh, 1% on $1m, that's almost $10k! I can see that how would discourage homeownership and distort the market. Actually wait, I can't.

wan23 5mo ago
You're comparing the wrong numbers. The question is what 1% of the purchase price does to the amount you need for your down payment and fees. On a 10% down payment an extra 1% increases the amount you need by 10%. Remember that while a million dollar home sounds extravagant, it's first time buyers who often have just barely enough who are trying to buy these.
- rootusrootus 5mo ago
  > On a 10% down payment an extra 1% increases the amount you need by 10% Because you are not allowed to roll that tax into the loan?
  - saulpw 5mo ago
    That seems to be the case, though there are other tricks (like raising the sale price and getting the seller to pay the tax).
zeroonetwothree 5mo ago
“almost”?

webdood90 5mo ago

Who are you protecting here? You realize a very small subset of the population can afford a million dollar home, let alone a five million dollar home? The majority of the city does not give a shit.

giantg2 5mo ago
"The majority of the city does not give a shit." Based on the voting, it seems they do give a shit but in the opposite direction.

smallmancontrov 5mo ago

Golly gee willikers, not the spooky potential for possible side effects! Wouldn't want any of those when we could have gigantic sucker-punch scarcity-amid-plenty instead!

nh23423fefe 5mo ago
my neighbors have so much they don't deserve, how can i steal their property!
- cybercatgurrl 5mo ago
  meanwhile they’re scheming against you to see how much you’re willing to pay before you can’t afford to eat anymore just to buy that extra home. it’s an absolutely beautiful thing. they deserve it all and rightfully so!
- array_key_first 5mo ago
  Taxes = theft is one of the most tired, low-brow, and intellectually lazy viewpoints ever. We all understand the concept of commons. We all understand the concept of money pooling. Don't pretend it doesn't make sense or it's evil when most people pay for private insurance anyway or even fucking Claude Code subscription plans which follow the same concept.

8note 5mo ago

> people tend to lose money on housing in NYC unless it's held for many years. I'd generally consider that a success metric? People making money flipping houses on short terms is a bad thing

bsimpson 5mo ago
What's a reasonable time horizon? What should happen when you find a mate and need more space than you did when you moved into your current unit? A friend moved out of his space after 7 years to start a family, and the appreciation didn't cover the closing costs.
- bdangubic 5mo ago
  they way to “handle” this is to stop viewing housing as “investment” - especially short-term investment. once you do that, you are good. when you buy you will consider all the implications of that decision and then you can live with it when you need different housing
  - chii 5mo ago
    > stop viewing housing as “investment” whether something is an investment or not is not a subjective opinion, but an objective fact. If it takes effort, capital and time/labour to create, it's an investment, because such resources have alternative uses. Just because this cost have been paid as a lump sum in the past (for constructing a building and/or buying the land etc), doesn't mean that cost is now sunk and is "lost" - it is, and must be, recouped in the future, otherwise the initial cost will not make sense to have been spent, and said investment would not be made and the world would now have one less of it.
    - barnabee 5mo ago
      Now do cars and food… There’s no reason that the cost of something you need “must be recouped” in future by you having and using that thing.

gib444 5mo ago

> ...when $1 million was still considered a lot of money They knew exactly what they were doing by not indexing it.

thrance 5mo ago

I'll hit you with a big: source? This kind of talking point is reiterated ad nauseam, but never justified or backed by any empirical research. I'll state one simple thing: if America is unable to raise taxes on second homes over $5M in Manhattan by 1% then this country is well and utterly fucked. The 1% are paying less taxes than anyone else in this country while hoarding the majority of the wealth. Homelessness is skyrocketing, debt levels are through the roof, but god forbid we raise the tax on second homes over $5M by 1%.