To recap from my post here, borrowing from the French and literally meaning "foot on ground," a pied-à-terre refers to a small apartment, house, or room kept for occasional use. In essence, it is a small second home that is not the purchaser’s primary residence. The Office of the City Comptroller, Scott M. Stringer, estimated that a pied-à-terre tax would bring in a minimum of $650 million annually. This not only would cause likely massive problems in the already-suffering New York real estate market, I pointed out how this potential new tax could affect the more basic residency issues that many of our clients with second homes in New York State or City often face. When taking into account recent residency case law that does not often favor the taxpayer, it might be considerably less expensive for them to pay the pied-à-terre tax on their secondary residence than be subject to income tax on all of their income!
State Senator Brad Hoylman of Manhattan has been fighting to enact a pied-à-terre tax since 2014 with Assembly member Glick. The two championed the legislation last year premised on the notion that the tax would provide critical new revenue to sustain New York City’s infrastructure. As my colleague so aptly covered here in a very detailed explanation of the nuts and bolts of how this tax would work, it seemed that while New York’s lawmakers sought to find new ways to fund New York City’s subway system, the pied-à-terre tax was viewed as a new quill in the arsenal. However, many economic experts believed that it was simply the wrong idea at the wrong time. Although it was not meant to be in 2020, Senator Hoylman has not given up. Stay tuned to see what happens as state lawmakers now revive efforts to impose a pied-à-terre tax.
