I understand they are taxed under the code as a "condo" but isn't the point of the article that they are not taxed at the rate of a normal condo vis-a-vis their sales price?
Since the sales price is 6 sigma to the right on the bell curve, it doesn't surprise me at all that the tax rate as a percentage of sales price would be similarly offset to the left. I think it would have made the analysis better to have also ranked the dollar value of tax revenue per dwelling unit, and you would see they are paying an extremely high share under that metric. But then the title of the article would have to be "Why Billionaires Pay the Most Per Capita Property Taxes in New York".
Another way to look at it, is if the tax rate were 1.7% instead of 0.017% then the building could not have been built. If the rate were 0.17% the sales price would have been closer to $10 million than $100 million. I think there is no scenario where the city gets the tower, the condo sells for $100 million, AND the city takes even .17% each year in property taxes.
The article reads like the city paid to build the tower and is giving the units away rent-free. It just seems like such a distorted view of the full macroeconomic impact, when in fact NYC is getting exactly what Bloomberg meant when he said he hoped the billionaires to move in.
<i>isn't the point of the article that they are not taxed at the rate of a normal condo vis-a-vis their sales price?</i>
That isn't the point I'm making. Ultra-luxe condos are taxed the same way as normal condos are. It's the same mechanism. But the formula is crude and can't anticipate that there might be condo buildings with no comparison in the rental market.
<i>I think it would have made the analysis better to have also ranked the dollar value of tax revenue per dwelling unit</i>
The charts I included do show the dollar value of tax revenue per 10 units that sold for extraordinary prices. Perhaps these dollar values (e.g., $17,000 per year) do seem very high, but that is a matter of perspective. If you are the owner of a $5 million condo, and you pay $17,000 annually in property taxes, it will seem outrageous that the owner of a $100 million condo pays the same. This is why it's important to compare effective property tax rates. Just comparing numbers or digits is meaningless in a discussion about in/equity.
<i>I don't think there is a scenario where the city gets the tower, the condo sells for $100 million, AND the city gets 1.7% each year in property taxes.</i>
Perhaps not. I still think the burden is on the city and state to demonstrate why the inequity is warranted.
Since the sales price is 6 sigma to the right on the bell curve, it doesn't surprise me at all that the tax rate as a percentage of sales price would be similarly offset to the left. I think it would have made the analysis better to have also ranked the dollar value of tax revenue per dwelling unit, and you would see they are paying an extremely high share under that metric. But then the title of the article would have to be "Why Billionaires Pay the Most Per Capita Property Taxes in New York".
Another way to look at it, is if the tax rate were 1.7% instead of 0.017% then the building could not have been built. If the rate were 0.17% the sales price would have been closer to $10 million than $100 million. I think there is no scenario where the city gets the tower, the condo sells for $100 million, AND the city takes even .17% each year in property taxes.
The article reads like the city paid to build the tower and is giving the units away rent-free. It just seems like such a distorted view of the full macroeconomic impact, when in fact NYC is getting exactly what Bloomberg meant when he said he hoped the billionaires to move in.