Comment by bsimpson
4 hours ago
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.
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.
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.
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.
> 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
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.
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!
my neighbors have so much they don't deserve, how can i steal their property!
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.
"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.