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News 12 Staff

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The city's Department of Finance has published a new public list of properties across the five boroughs and is sending letters to homeowners who may be on the hook for a secondary property tax, that is if they cannot prove their home is their primary permanent residence. The surcharge applies to secondary property. Properties valued at more than $5 million. The city estimates it could generate roughly $500 million to close a significant budget gap. Joining us now to break it all down is on the basics of this tax and what property owners need to know is real estate attorney Jordan Metz. What does this new PETA tear tax actually mean for the secondary homeowners? So, um, the tax was enacted by New York City ostensibly to charge folks who utilize service, the services of New York City, and don't otherwise pay New York City tax to pay for them. So for example, um, if I live outside of New York City, but I own a condominium unit in New York City. Um, I don't in and of itself pay New York City tax because I'm technically not a New York City resident. Um, and the city legislature determined that that's not fair, um, that if I own real estate in New York City, and don't pay New York City income tax, that I should contribute to the cost of those services. Um, and there are obviously arguments, you know, for and against that position, um, but that was ultimately the decision of the New York City Council, and that's what resulted in the current legislation. So this tax would apply to secondary homes that are worth $5 million or more. It's expected to generate about $500 million in revenue for the city to close their budget gap. How big of a financial impact could this be for owners with these properties that qualify for this tax? Um, I mean, I guess it depends upon the magnitude of the real estate that's owned. I mean, we've gotten, you know, queries from clients that own units that are 123, or $5 million in value, and then we've gotten inquiries from clients that own units that are in excess of $10 million in value. Um, and, you know, for the most part, it's, it's pretty much just the cost of doing business. If you want to own real estate in New York City, and you're not otherwise paying New York City income tax, then this is the city's way of saying you need to contribute. Um, and, you know, the, the, the taxes, it's a, it's a sliding scale, it's a percentage of, you know, the, the, the calculation depending upon the value of the property. Um, and it's, um, like I said, it's the cost of doing business by owning real estate in New York. From your standpoint of anything that you've seen thus far, I know this is just starting to get rolled out. Are there property types or ownership structures that are being captured in this that people may not have expected initially? Um, I mean, it's pretty much, you know, any single family home, co op or condo that's not being used as a primary residence, and there are, there are exceptions. For example, if you lease the, the real estate out on an arm's length basis pursuant to a market lease to someone who is going to reside in the apartment as their primary. Residences, then it's exempt if you're going to have an immediate family member live in the, in the real in the real property, whether it's a co op or a condo or a single family home, then that's exempt. So there are exemptions, uh, that, uh, you know, uh, under the, under the tax scheme, um, such that not everybody is captured by by the Perter tax. So right now the city is actively sending out letters to people who may qualify for this additional surcharge. I know there was a lot of confusion about a list that went down, went out with people's addresses, but that the city clarified yesterday that that actually was just like the role of all different properties across the city, not specifically people who were Going to be impacted by this. If someone thinks their property was wrongly classified as a secondary home and it is their primary residence, any guidance on what they should do? Yeah, they have, and the notice will have instructions in it, but it'll provide that they have 30 days to provide documentation or evidence to the city that either the property's not covered or Or that they're exempt from the tax because either they occupied it as a primary residence or they fall within one of the other exceptions. Do you think that 30 day time frame is a realistic period to gather documentation to do that, or I think so. I mean, um, you know, if, if I live in the apartment, my tax returns will show that, my driver's license will show that, you know, that, that documentation is easily. Accessible and can be provided, um, same if it's, uh, if it's being rented. If it's being rented pursuant to a lease, then presumably the owner has a copy of the lease in his or her file. You provide a copy of the lease. You may have to provide evidence that, um, you know, rent is being paid on a current basis, but presumably all of that information should be readily acceptable, uh, readily accessible. And do you expect that this tax could change how wealthy homeowners kind of structure or use their secondary homes here in New York City? Yeah, I mean, it will certainly have an economic impact on, you know, that, uh, that swath of the market. I think, you know, uh, Property purchasers will think twice, uh, about whether to purchase a Perrater, um, you know, it'll need to be factored into the cost. I mean, it's like anything else, you know, the city and state charge, you know, transfer taxes on the transfer of real estate, uh, to raise revenue for the state and the city, um. You know, many years ago, a mansion tax was, was imposed, um, you know, payable by the purchaser to additionally raise revenue. So, you know, historically there's been a panoply of taxes that have been enacted to raise revenue and to capture revenue where, you know, those in power believe that that, you know, the affected parties should be taxed in order to pay their fair share. Come on power and politics, bread, meats, cheese, seafood, and other staples could soon be cheaper at select grocery stores across the city. We're tracking the latest development in the Momdani administration's plan to slash grocery prices and make a trip to the supermarket more affordable. We'll tell you where next.

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wants to make groceries cheaper for New Yorkers, announcing prices will be slashed on certain items at the five city-run grocery stores once they open. This is Power in Politics, and I'm Heather Fordham. Shoppers will pay about 30% less for certain basic foods at city-run grocery stores. The mayor says they will not be competing with the neighborhood bodegas or mom and pop grocers, saying the goal instead is to fill gaps, not take customers. At Western Beef in the Bronx, a bag of Ben's rice is $10.99 but at a city-run grocery store, that price will be just above $7. All of this leaves too many New Yorkers feeling like groceries are out of reach. Mayor Mamdani says more than 20 staple items will be discounted by 30% once a month for a month-long period. The city will set prices for basics like. Produce, meat, seafood, bread, rice, beans, and cheese. Other items will remain at market rate. That means no weekly fluctuations nor sticker shock at the checkout line. The mayor says shoppers could save about $90 a month, or roughly $1000 a year on their grocery bill. La Marquetta in Harlem and La Peninsula in Hunts Point were announced as the first two city-run grocery stores set to open. The other Three locations have not yet been announced, and the city is still looking for experienced grocery operators to run them, and we want an operator dedicated to job quality and accountability, an operator operator that ensures workers' rights are respected, provides good paying jobs and benefits. Critics worry the project could create competition for local mom and pop grocers and bodegas, but Mamdani says that won't be the case. The stores will not sell tobacco, lottery tickets, hot food, or alcohol. I've participated in multiple roundtable discussions with affected grocers to hear their concerns. That's why the mayor's announcement makes clear we're not looking to compete. We're only going to sell a certain amount of goods, the basket of goods, basket of core goods, and we're going to avoid the items that are real revenue generators for the smaller groceries. The city has put aside $70 million in the capital budget to make this all happen. The first city-run grocery store is expected to open next year in the Bronx, followed by La Marquetta in Harlem with a goal of 2029. The mayor says his overall goal is to open all of the five stores by the end of his first term in 2029. Thanks for joining us here on Power and Politics. I'm Heather Fordham.

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News 12's Heather Fordham sat down with the Commissioner of Small Business Services, Kenny Minaya, about what these changes mean for entrepreneurs.

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