LEGISLATIVE AFFAIRS: Flip Tax Would Damage Home Sales in NYC
Philip Weiden | November 2019
A bill (S.3060E) to amend the New York City Administrative Code has been introduced by New York State Senator Julia Salazar for the third year in a row.
The bill, known as the “New York State Small Home Anti-Speculation Act,” is in reality, an onerous transfer tax.
Commonly known as a flip tax bill it would harm the already fragile New York City housing market. The bill by Senator Salazar would impose a 20% tax on homes sold within one year of purchase in New York City and a 15% tax on homes sold within two years.
The purported goal of the bill is to stop house flipping, which supporters view as artificially driving up prices and forcing people out of their homes, making it more expensive to live, work and play in a particular neighborhood.
This bill is essentially another transfer tax. House flipping tends to improve buildings and homes of all types as a new purchaser is likely to make improvements to the property.
If the bill is enacted it will likely continue to harm sales and hurt the smallest buildings that desperately need the infusion of capital. This, proposal, once again, does not align with the goal of fixing the affordability crisis. It also does not address the supply side of housing with the number of housing units built not keeping up with population growth.
This proposed legislation would be following on top of the new mansion and transfer taxes enacted in New York City that have already slowed sales in the “higher end markets.”
The action to take on this is to contact the Senate Majority Leader’s office (Sen. Andrea Stewart Cousins) and Senator Julia Salazar’s office and urge them to abandon this ill-conceived legislation.
Stay tuned for updates on this proposal.