Manhattan Luxury Market Thrives Despite Pied-a-Terre Tax

New York Real Estate Practice Group Leader Stuart Saft was cited in a Habitat Magazine article about New York's newly passed pied-a-terre tax and its potential effects on Manhattan's luxury real estate market and co-op community. The article reported that luxury sales in Manhattan have remained strong despite months of industry concern that the tax, which applies to New York City homes worth $5 million or more owned by nonresidents, would depress property values or deter wealthy buyers. Although the tax is expected to generate significant revenue for the city, it may create challenges for co-op boards, which will be responsible for collecting the surcharge from shareholders who use their apartments and condos as second homes. Mr. Saft told Habitat Magazine that the structure of the law could provoke a "mountain of litigation," particularly over whether managing agents can be required to collect the tax from shareholders.

"It's a very complicated issue," he said. "I wish more thought was given to it, because a lot of people are going to be hurt by it."

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