The New York Sun has an interesting article on the effect of the Cuomo tax on real estate in New York. Experts now say this tax stunted the real estate market and created the boom in New York real estate when it was repealed.
Bad taxation leads to more headaches and allows the law of unintended consequences to rule the day.
Ten years after the repeal of the “Cuomo tax” – the 10% surtax on capital gains for real estate transactions more than $1 million in New York State – some see in the tax’s death the beginnings of New York City’s building boom.
Beginning in 1983, the tax collected $4.3 billion in revenue for New York State. Governor Cuomo said that the unpopular tax may have been a reason he lost the 1995 election to George Pataki. Governor Pataki, if he seeks higher office, will certainly trumpet his role in the 1996 repeal of the tax.
Critics of the tax, who include real estate interests, tax professionals, and fiscal conservatives, call it one of the worst taxes in New York State history. They compare the booming real estate market of the last decade to the static building environment of the early 1990s as proof that the tax stunted growth here. Its repeal, they say, is one of the factors behind the current boom, arguably the greatest in the city’s history.
Repeal of a Tax Ignited Boom In Real Estate – June 21, 2006 – The New York Sun.
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