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“I think the pied-à-terre tax is the canary in the coal mine for property tax reform,” said Manhattan Borough President Brad Hoylman-Sigal, who introduced the version of the tax in 2019 when he served in the legislature. “The owners of these trophy properties are paying a lower effective tax rate than single-family homeowners.”
The gap between posh co-op and condos’ real-world and taxable values is a vestige of the 1980s, when apartment ownership was rare. Rental buildings were converting to ownership via co-op apartments, but those buildings still kept some rental apartments, many of which were rent-regulated. That history is why state law directed DOF to consider theoretical, would-be rental income for many buildings that now have few or zero rental apartments.
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