Gov. Kathy Hochul’s chaotic rollout of the state budget is keeping real estate on its toes.
Nearly two months after the deadline, New York lawmakers still haven’t approved a full budget agreement, including two proposed taxes that, if enacted, would significantly impact the industry.
Earlier this week, a controversial proposal to tax cash sales of homes in New York City priced at $1 million or more was rumored to be falling apart just a week after the plan made headlines. Under the plan, buyers would have to pay an additional 1 percent levy on their deals.
News of the all-cash tax came after the governor’s office released details about another contentious proposal, dubbed the pied-à-terre tax, which would tax second homes in the city valued at $5 million or more annually.
Hochul announced the levy weeks before sharing specifics of the plan, frustrating industry players not just with the plan itself but also with the confusion about how it would actually work. Beyond the mechanics behind these programs, others also raised concerns that the pied-à-terre and cash purchase taxes would not hit the revenue targets lawmakers projected, particularly if these programs slowed sales or if owners found ways to skirt them.
The state’s budget consists of 10 bills, some of which lawmakers have already approved. However, the revenue bill, in which both proposed taxes would be included if they make the final cut, has yet to be passed, though a vote is expected next week.
Hochul’s delayed delivery is likely part of a strategy to dial up the pressure on state lawmakers, whose paychecks are tied to the budget deal. The longer Hochul holds out, the more likely legislators are to agree to some of her proposals that might not have passed outside of the budget. It also leaves lawmakers with less time to pass their own bills before the legislative session ends.
We’ll see if that bet pays off next week.
What we’re thinking about: Now that Compass is a residential juggernaut, we’re keeping an eye on how the company wields its might. So far, it’s thrown most of its weight behind the private listings, but how else could it influence the industry? Send thoughts to sheridan.wall@therealdeal.com.
A thing we’ve learned: Mayor Zohran Mamdani is partnering with several restaurants across the city to offer six weeks of $26 specials coinciding with the World Cup, Eater reported on Friday. The announcement follows news that the tournament is not shaping up to be the windfall some city officials initially expected, as hotel vacancies persist.
Elsewhere…
— One of two runways at LaGuardia Airport has been closed since Wednesday, after inspectors found a nearby sinkhole, the New York Times reported. The Port Authority of New York and New Jersey is now planning to reopen the runway Saturday morning, a day after repair work was initially expected to be completed. The closure has caused significant flight delays ahead of the long weekend.
— New York legislators passed legislation that would ban potassium bromate, a substance added to some flours used by many bagel shops and pizzerias, the Associated Press reported. The ingredient is already prohibited in several other countries. The NY bill is still awaiting Hochul’s signature.
Closing time
Residential: The most expensive residential sale recorded Friday was $17.8 million for 200 East 79th Street, PH20. The new construction unit on the Upper East Side is 4,900 square feet. Douglas Elliman’s Lauren Muss and Lisa Mathias have the listing.
Commercial: The most expensive commercial transaction was $7.5 million for 499 Grand Street. The Williamsburg rental is three stories and 5,600 square feet. Real estate investment group Greenbrook Partners sold the property to an undisclosed LLC.
New to the Market: The highest price for a residential property hitting the market was $12.3 million for 217 West 57th Street, Unit 36C. The Central Park Tower condo is 2,500 square feet of new development. The Corcoran Group’s Carrie Chiang and Emmitt Tilyou have the listing.
Breaking Ground: The largest new building permit filed was for a proposed 81,582-square-foot, nine-story mixed-use building at 604 Union Street in Gowanus. Kao Hwa Lee Architects is the applicant of record.
— Joseph Jungermann
