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Queens Chronicle

Would another tax on mansions hurt Qns.?

Some say 2.5 percent surcharge on $2 million-plus homes is bad idea for boro

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Posted: Thursday, February 23, 2017 10:30 am

Some Queens realtors are not supportive of Mayor de Blasio’s proposed mansion tax, a policy City Hall is once again pushing that would create a 2.5 percent marginal surcharge on residences that sell for more than $2 million.

The mayor has said that the tax would raise more than $330 million in revenue yearly to fund rent subsidies for 25,000 low-income seniors. It would be a marginal surcharge paid by the buyer that would add to the existing 1 percent fee on sales reaching $1 million or above. Unlike the 1 percent tax, it would only be applied to the value over $2 million. (For example, a $3 million sale would have a $25,000 tax under de Blasio’s proposal in addition to the $30,000 required by the 1 percent tax.)

Long Island Board of Realtors President David Legaz called the mayor’s intention to fund low-income senior housing “laudable” but said that the cost should be borne “equally among New York City citizens.”

According to de Blasio spokeswoman Melissa Grace, the average price of a residence reaching the proposal’s threshold is $4.5 million.

“At a time when many of those buyers are likely to receive a significant federal tax cut, we believe it’s urgent they contribute more to help seniors in need,” she said.

Eight percent of New York City sales between 2014 and 2016 exceeded the proposed tax’s threshold, according to a report last week from the Independent Budget Office.

Most places that pricey are in Manhattan, although several Queens neighborhoods had sales north of $2 million last year: Forest Hills Gardens, Douglaston, Whitestone, Flushing and Astoria.

Kathleen Springer, an Astoria-based realtor, says that $2 million might be too low a threshold.

“It should be higher than 2 million dollars in this market, in Queens,” she said.

Queens Chamber of Commerce Executive Director Thomas Grech is opposed to de Blasio’s proposal.

“I think right away, whenever there’s an issue, we turn to tax instead of trying to be better, smarter, cheaper, more efficient,” he said. “I think the city ought to be a little more stringent in terms of how it provides services to New Yorkers.”

But not all realtors surmise serious issues arising from the mansion tax: Paul Halvatzis of Amorelli Realty says its effect would be minor, given the typical income of $2 million-plus home buyers.

“If you’re in that price range, it’s an inconvenience, it’s a nuisance,” he said, adding “I don’t think that you’re gonna impede it too much,” he said. “It’s just another fee you’re throwing into the mix.”

The tax would need approval from Albany lawmakers, none of whom have thus far put forth any bill that would establish the surcharge.

Its chances are dicey in the state Legislature. Even if the Assembly passed a law establishing the tax (for which it would first need a primary sponsor), Senate Majority Leader John Flanagan (R-Nassau) has called it a “non-starter.”

The office of Gov. Cuomo did not immediately return a request for comment.

The mayor has sent a request to the Assembly that the mansion tax be included in its budget plan. A spokesman for Assembly Speaker Carl Heastie (D-Bronx) did not immediately return a request for comment.

At least one Queens lawmaker would support it: state Sen. Toby Ann Stavisky (D-Flushing), a member of the upper chamber’s Finance Committee. But she blames GOP-allied Democratic senators with making it unpassable in this session. The lawmaker says the case would be different if the GOP did not control the upper chamber.

“Then, we would have the votes to enact this and many other pieces of legislation that are being held up because of the rogue Democrats,” she said. “They’re working with the Trump people.”

If the seat of former Manhattan state Sen. Bill Perkins is filled by a mainline Democrat and the eight-member Independent Democratic Conference and Simcha Felder (D-Brooklyn), who caucuses with the Republicans, returned to the main Democratic fold, Republicans would no longer control the chamber. (The latter two events are considered unlikely, though.) And if only the former two happened, the Senate would be deadlocked; tiebreaking votes would be given by Lt. Gov. Kathy Hochul.

Another Queens lawmaker on the Senate’s Finance Committee, state Sen. Tony Avella (D-Bayside), who is running against de Blasio for mayor, is less sure about the bill.

“In northeast Queens, the prices are out of control. It doesn’t mean that these people are millionaires,” he said. The lawmaker, who supports Gov. Cuomo’s proposed “millionaire’s tax” on income, said he would be more supportive of a bill that creates a special income tax for individuals making more than $2 million a year.

“De Blasio’s such a phony because he’s permitting these developers throughout the entire city to build luxury housing,” he said, adding that upscale residential buildings often raise the price of surrounding homes. “He’s pushing middle-class homes into this so-called $2 million bracket. He’s creating the problem and now he wants to tax the problem that he’s created.”

The lawmaker also disagreed with Stavisky’s contention that non-mainline Democrats in the state Senate — such as himself — are keeping the proposed mansion tax from becoming law.

“Sen. Stavisky doesn’t know what she’s talking about,” Avella said. “She should actually do some research before she opens her mouth. ... She’s the most ineffective legislator in the entire Senate.”

Every Democratic senator, he added, would likely not vote for the bill. The DREAM Act on financial aid for immigrants failed in the Senate three years ago because it was short two votes, he noted; one of the “no” votes came from a mainline Democrat.

A spokesperson for Stavisky declined to respond to Avella’s remarks, saying, “We’re choosing not to make it personal, we want to focus on the issues.”

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1 comment:

  • Buster57 posted at 5:31 pm on Thu, Feb 23, 2017.

    Buster57 Posts: 68

    You need to have accurate Market Value Rates on homes, then the tax on $2 million dollar homes won't effect the middle class. They increase the Market Value just to get more in taxes which is a huge burden on the middle class. If they would be honest about Market Values then the rich would be paying the additional tax not the rest of us who are trying to fight the system and prove our homes aren't worth what the city says our Market Value is.