Pied-à-Terre Tax Will Hurt Investments in NYC

0:00 Speaker 1 New York. What’s going on in the real estate industry. Well, there’s concern there’s concerns about the new laws being passed in Orbany and will it hurts real estate. Well, we have Suzanne Miller with us and she’s been in real estate for a long time and she’s president of the Empire State Properties, a boutique real estate firm. Well, Suzanne Miller,

0:27 I need your opinion.

0:29 Speaker 2 Good morning, John. There’s Pierre to day at tax. It’s funny. I just talked about this on your show the day before he announced this. So just the term is Pierre da terra means foot in the land. It’s a French term.

0:42 And I don’t to me this is really just political. It’s just it’s really just at this point, it’s not going to really affect much because we’re talking about a city of eight million people. We’re talking about eleven thousand and two one hundred people that this will affect. So let me just go through who’s going to be affected

1:05 by this. If you have a home that’s worth less than five million dollars, no tax. If you have a home five to six million, we’re talking about a half percent, and then it goes up between from six to ten one point one percent, and then at twenty five million, we’re talking about max twenty five million and up four percent.

1:27 So John, it’s not really.

1:30 Speaker 1 About one time. Is that a one time one time?

1:33 Speaker 2 It’s a one time thing. But if you look at the whole system, the taxes are assessed completely wrong. So if you take a two hundred and thirty eight million dollar apartment like we’re talking about right now, do you know what the assessed value.

1:46 Speaker 1 Of that is that we’re talking about Griffin there.

1:49 Speaker 2 Well I’m not mentioned any names, but do you know what the assess value of that apartment would be according to the tax assess nine point four million dollars. So the whole system is wrong. They are they are basing taxes on appraised potential rental, So who’s the size on this?

2:07 So that is really the issue. To me, this is just a political theater for so that Mmdonnie could have said that he did something and it’s going to affect eleven thousand people that do not vote. If you’re not here, so you don’t vote, So to me, it’s just a band aid. It doesn’t address the real issue, the real

2:28 issues we need to overhaul. We need an overhaul on the whole tax system, and I want to see if there’s money in the budget to fight this. I think the appraises are going to make a lot of money.

2:38 You’re going to see everybody coming in with new appraisals running and saying that their places are worth four point nine million, because that’s what’s going to happen. It’s it’s just it’s it doesn’t make any sense to me, don’t.

2:50 I think that the real damage will be if you want to build a building, you may think twice because it’s a psychological warfare. You don’t really want to build or be where you don’t feel welcome. Now, John, you’re not going to leave New York, but you may not build it out of the building. So I don’t think

3:06 it’s going to affect people leaving, but it will affect your psychological feeling that you might not want to build more. You may not want to have a bigger footprint here because you don’t feel welcome to me. That’s a bigger issue than the dollars here on this little tax So, Zan Millo.

3:22 Speaker 1 That’s the most intelligent way I’ve heard this this week, and thank you, But it’s true. It’s the assess valuation. Yes, and and it’s a one time tax.

3:41 Speaker 2 Yeah, it’s a band aid. It’s the real issue here is that the system is broken. Taxes are valued on the potential rental income, not the actual price. So if you buy a place for two hundred and thirty eight million dollars, then the assessed value is nine point four million.

3:57 Why are we complaining about that tax. It’s not about that. It’s about telling the people that we’re evil, that the rich people shouldn’t be here, That you may not want to build another building that will hurt the construction workers, that will hurt the little stores, that will hurt the ubers.

4:12 That’s what I’m worried about, not about attacks. It’s the whole psychological warfare. It’s psychological warfare to me, that’s what’s happening. We want to tax you because you don’t vote. That’s how I look at it.

4:26 Speaker 1 Unbelievable. Well, Suzanne Miller, that’s the most Like I said, I’m really sincere when I’m saying this. You gave it to us, plain and clear, and that’s how most people want it. No matter how smart you are, no matter how done you are, you want to plain and clear and thank you and let’s catch up again real soon.

4:46 Speaker 2 Okay, Thanks John, thanks always,