Comment by bsimpson
2 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.
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.
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.
> 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.