Reply to Non resident luxury tax on $5M + properties.

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I am not even sure how they can enforce this. There so many ways to avoid classifying the property as a second home. [/quote]

I have not followed this closely, but I suspect anyone who does not pay NY city taxes (income taxes) but owns a property over $5 mil would be subject to this new tax.[/quote]

There is a lot of gamesmanship that can be had. For example, if you place in LLC or Trust and rent the property to yourself, rent the property to your child, etc.. It would no longer be considered a second home. [/quote]

This is not really accurate. Having it owned by an LLC doesn’t avoid the tax. And if you rent it and claim it is an investment property, then you’ll pay income taxes on that rent and property taxes as well. And even then, it has to be arms length terms to avoid the PT tax, and if you crash there occasionally or the child doesn’t pay market rent, you might pay the tax anyway plus the other taxes.

It is humorous to me that all of you laptop warriors think you’re smarter than the govt. [/quote]

This isn’t true. Property tax is deductible. Wit depreciation you’ll protect most of that rental income in the early years. You can also stay in that apartment for personal use up to 14 days per year or 10% of rented days, whichever is higher, and still have it deemed an investment property.

Real estate is complicated and NYC has no idea how these owners will not cough up the measly 500mm they want (and 500mm is not nearly enough to matter)[/quote]

Real estate is complicated but NY has savvy people, sorry.

This is all fairly inaccurate. SALT- property tax deductions are capped and if you’re renting at anything approaching market rent, you’ll blow through the ded limit in about a month.

As far as staying in the apt for 14 days, that’s an IRS concept, and has nothing to do with how NYC categorizes the apt. If you want to avoid the SALT ded cap, it must be a real investment property with real tenants and at market rent. In nyc, you can’t do short term rentals btw.

So essentially you’re either holding an investment for which you will pay income taxes on the rental. Or you’re sitting on a second home and you’ll pay piede a tiere tax. Or it’s your primary home and NYC gets to tax you on ALL of your income, wherever it is earned. [/quote]

There is no salt cap for a pass through entity claiming property tax as a deduction.

NY state and NYC tax collectors are not savvy. Trump and the Dursts and other RE families effectively don’t pay taxes, and there’s nothing bitter losers like you can do about it. [/quote]

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