alt Hacker NewsI think this is in the right direction, but the cut off at $1M is interesting.
Why's there an obsession with the $1m cutoff?
The dollar has been turned to dust. $1M is not that much money, especially in housing, especially in NYC.
Why tax $1m second homes and not second homes generally? Effectively, you're going to tax almost all second homes.
So why the arbitrary cutoff?
Chicago wanted to add a "millionaire's tax" on $1m+ home sales. At least in Chicago, that isn't effectively taxing the vast majority of housing (and total value) - so there's some distinction worth having.
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As TFA states, in NYC the assessed value of a home and the market value of a home are wildly different, with the assessed value being much, much lower.
This is $1mil in assessed value which would translate to roughly $5mil in market value.
In NYC $1mil market value is pretty much the starting price for a 1-bedroom condo in a gentrified area. $5mil market value, on the other hand, is a pretty luxurious place.
Below 1M in NYC it becomes unclear why you have a second home. Maybe you're not quite "wealthy" and it's really helping your family out in some way. No reason to complicate things, the cutoff actually simplifies it while sacrificing almost nothing in terms of what the tax is trying to accomplish.
The Netherlands has a 2.2% tax on secondary properties with a €50k threshold (total wealth, not per-property). So any holiday home, shed, storage locker, garage space, parking spot, bungalow, pied-a-terre, apartment for your children falls under that tax.
It's.... problematic to say the least. Say you bought a bungalow for €30k in the 2000s that you frequently visit to escape the city. You are a middle class worker, it's paid off and monthly costs are minimal. It is now worth €350k. You need to pay €7700 a year. Most people don't have that type of money so they are forced to sell.
>Why's there an obsession with the $1m cutoff?
I think this is because the term "millionaire" is a catchy term. And that caught on in the 1800s.
1 million remains the hallmark of 'wealthy' (as in: not us), to the point where pop culture has started mocking the concept decades ago (See: That Austin Powers movie...)
Hardly everyone understands 'owning a house' as millionaire-level wealth. Which is why people cheer the policy on until they realize it is them who is being shaken down.
I agree and I’d prefer to see apartments excluded from this. Apartments are what I want second-homeowners to own rather than hoarding valuable land.
Read the fine article?
> While the tax seems large, experts say the city’s antiquated assessment and valuation system dramatically undervalues properties, reducing the burden. City valuations can often be 10% or less of the true market value, they said.