Everyone wants to ‘tax the rich.’ In New York City, it’s getting complicated

Tax partner Mark A. Limardo, was quoted in The Associated Press in an article discussing the status of the new "pied-a-terre" tax in New York City and how the new tax has created confusion and prompted pushback and litigation from homeowners.

According to the article, "[w]hat seemed at first like an easy idea — slapping a new tax on people who own luxury second homes in the Big Apple but live elsewhere most of the year — has instead created a lot of confusion in the city’s notoriously convoluted world of real estate arrangements."

The article also notes that a group of homeowners brought a lawsuit over the city's rollout of the tax arguing that officials had not done enough to determine who would have to pay the tax, shifting the responsibility to the property owner. A judge put the process on pause, but the city moved to appeal.

The article highlights that there are numerous arrangements that can complicate who would be subject to the tax, including properties placed in trusts and limited liability companies, making it hard for the government to tell who may actually reside in an apartment. 

“Those situations make it difficult to prove people are in there,” said Mark. “The concept is simple, but the ownership rules and the documentation rules have made it very complicated.”

Read the full article in The Associated Press here. Access may require a subscription.