Luxury real estate firms in New York City make a lot of money helping wealthy foreigners exploit the state’s tax laws–now some firms overseas want to share in the joy of being richly rewarded middlemen. The Times reports that real estate companies from Germany and London are expanding here to explicitly target New York’s “ever-expanding number of foreigner-friendly buildings…
Swimming pools and modern design and blotting out the sun all do wonders for a plutocrat’s esteem, but the main reason for dumping $88 million into a glorified dorm room is because New York City is an ideal cash cocoon. Their money lives here so they don’t have to.
State Senator Brad Hoylman wants to create a graduated 4% pied-a-terre tax to units above $5 million. The bill, inspired by a proposal from the Fiscal Policy Institute, would only affect 1.75% of the 88,851 non-primary resident owned coops and condos; the 1,556 units that cost $5 million or more account for $26.1 billion out of the total market for non-resident condos. According to FPI, 445 of those units are worth more than $25 million, and would bear 83% of the tax, and even then, the tax would be less than half of what London is charging its ultrawealthy foreign “residents.”
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