A01023 Summary:

BILL NOA01023A
 
SAME ASSAME AS S01569-A
 
SPONSORCruz
 
COSPNSRMitaynes, Mamdani, Gallagher, Reyes, Simon, Epstein, Rosenthal L, Raga, Ardila, Walker, Forrest
 
MLTSPNSR
 
Add §11-2120, NYC Ad Cd
 
Establishes the end toxic home flipping act; imposes a tax on the transfer of certain residential properties which are sold within two years of the prior conveyance of such property; exempts certain purchases of residential properties from mortgage recording taxes; imposes a tax on the transfer of certain properties in the city of New York which are sold for one million dollars or more.
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A01023 Actions:

BILL NOA01023A
 
01/13/2023referred to ways and means
01/03/2024referred to ways and means
01/30/2024amend and recommit to ways and means
01/30/2024print number 1023a
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A01023 Committee Votes:

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A01023 Floor Votes:

There are no votes for this bill in this legislative session.
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A01023 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1023A
 
SPONSOR: Cruz
  TITLE OF BILL: An act to amend the administrative code of the city of New York, in relation to the imposition of tax on the transfer of certain properties in the city of New York   PURPOSE OR GENERAL IDEA OF BILL: This bill seeks to create more opportunity and equity in the New York City housing market for first- time homebuyers by taxing home flipping.   SUMMARY OF PROVISIONS: Section 1 provides that the title of this Act is the "protect our homes and communities, stop predatory housing speculation act of 2023" Section 2 amends the administrative code of the city of New York by adding a new section 11-2120 establishing, in regard to residential property of one to three units sold within two years of purchase, an addition to the existing tax imposed by section 11-2102, of sixty-five percent of the difference between the current sale price and the sale price of the prior conveyance if the time since the prior conveyance is less than one year, and fifty percent of the difference if the time since the prior conveyance is greater than or equal to one year but less than two years. No additional tax is imposed if the time since the prior conveyance is two years or more. This section further provides that the following persons shall be exempt from the tax imposed by this section: (i) property owners conveying property to a family member and (ii) prop- erty owners who can demonstrate a financial hardship which justifies a conveyance of property is less than or equal to two years. This section further provides that the following properties shall be exempt from the tax imposed by this section: (i) property conveyed following the death of the property owner, (ii) property being sold as new housing, (iii) property for which the consid- eration or value conveyed is less than or equal to ten percent more than the value of the property conveyed at the time of the prior conveyance, (iv) property conveyed to a mortgagee pursuant to a foreclosure sale, (v) property otherwise exempt from payment of real property tax. Section 3 is a severability provision. Section 4 establishes the effective date of the act as 90 days after enactment.   JUSTIFICATION: New York City is facing an enormous housing crisis, fueled by COVID-19 and exacerbated by aggressive speculative investment. The pandemic has made it especially difficult for working, low-, and moderate-income New Yorkers to maintain housing stability as hundreds of thousands of work- ers have lost income and are struggling to pay their rent and mortgages. While New Ycrk families are struggling to stay afloat, real estate investors are amassing funds in preparation for the coming land grab when distressed properties hit the market. This bill seeks to create more opportunity and equity in the housing market for first-time home- buyers by taxing home flipping. Property flipping, where an investor purchases a home and resells it for a quick profit, drives prices up for would-be homeowners, increases property taxes, and provokes harassment of homeowners, who are overwhelmingly :Black and Latino, in rapidly gentrifying neighborhoods. Flipping is lucrative for investors, who target financially vulnerable homeowners (often seniors) and seek to dislodge them from their valuable homes at low prices. These unwanted and sometimes deceptive solicita- tions of homeowners are an annoyance at best, but can also involve outright fraud, and result in the displacement of longtime homeowners. When low-income homeowners are bought out and leave the neighborhoods, there is a ripple effect on renters as the often affordable rents in these properties are increased by investors looking to maximize profit. Flipping is not the only form that speculative investment takes in New York's small home neighborhoods: cash buyers are able to beat out first-time homebuyers pushing even the most modestly priced homes out of reach for families with limited financial resources.   PRIOR LEGISLATIVE HISTORY: A6574 of 2021-2022. Died in Ways and Means Committee.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: This act will create revenue for the state and local governments.   EFFECTIVE DATE: Ninetieth day after it becomes law.
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A01023 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         1023--A
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 13, 2023
                                       ___________
 
        Introduced by M. of A. CRUZ, MITAYNES, MAMDANI, GALLAGHER, REYES, SIMON,
          EPSTEIN,  L. ROSENTHAL, RAGA, ARDILA, WALKER, FORREST -- read once and
          referred to the Committee on Ways and  Means  --  recommitted  to  the
          Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2
          --  committee  discharged,  bill amended, ordered reprinted as amended
          and recommitted to said committee
 
        AN ACT to amend the administrative code of the  city  of  New  York,  in
          relation  to  the imposition of tax on the transfer of certain proper-
          ties in the city of New York
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. This act shall be known and may be cited as the "end toxic
     2  home flipping act".
     3    § 2. The administrative code of the city of New  York  is  amended  by
     4  adding a new section 11-2120 to read as follows:
     5    § 11-2120 Residential real property sold within two years. a. In addi-
     6  tion  to  the  tax  imposed by section 11-2102 of this chapter, there is
     7  hereby imposed on each deed, instrument or transaction at  the  time  of
     8  transfer  whereby  any  properties of one to three residential units are
     9  transferred by a grantor to a grantee, and such transfer is made  within
    10  two  years  from the prior conveyance of the property, including but not
    11  limited to transfers which are all cash transactions  and  transfers  of
    12  property  which  have  been  rented out during such time period. The tax
    13  which shall be paid by the grantor shall be at the rate of:
    14    (1) sixty-five percent of the difference  between  the  current  sales
    15  price  and  the  sales price of the prior conveyance when the time since
    16  the prior conveyance of the property is less than one year; and
    17    (2) fifty percent of the difference between the  current  sales  price
    18  and  the  sales  price  of  the prior conveyance when the time since the
    19  prior conveyance of the property is greater than or equal  to  one  year
    20  but less than two years.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00494-04-4

        A. 1023--A                          2
 
     1    b.  The tax defined in subdivision a of this section shall expire when
     2  the time since the prior conveyance of the property is two years.
     3    c.  (1)  The  following  qualified  persons  shall  be exempt from the
     4  payment of the tax imposed by this section:
     5    (i) Property owners conveying property to a family member.
     6    (ii) Property owners who can demonstrate a  financial  hardship  which
     7  justifies a conveyance of property in less than or equal to two years.
     8    (2)  The  following properties shall be exempt from the payment of the
     9  tax imposed by this section:
    10    (i) Property which was conveyed following the death  of  the  property
    11  owner.
    12    (ii) Property being sold as new housing.
    13    (iii)  Property  which  the  consideration or value conveyed, which is
    14  otherwise subject to the tax imposed in this section, is  less  than  or
    15  equal  to ten percent more than the consideration or value of such prop-
    16  erty conveyed at the time of the prior conveyance of property.
    17    (iv) Property which was conveyed to a mortgagee or an affiliate  agent
    18  thereof by a mortgagor be deed in lieu of foreclosure or in satisfaction
    19  of the mortgage debt.
    20    (v)  Property  which was conveyed to a mortgagee or an affiliate agent
    21  thereof pursuant to a foreclosure sale that follows  a  default  in  the
    22  satisfaction of an obligation that is secured by a mortgage.
    23    (vi) Property which is otherwise exempt from payment of a real proper-
    24  ty transfer tax pursuant to this chapter.
    25    § 3. Severability. If any clause, sentence, paragraph, section or part
    26  of  this act shall be adjudged by any court of competent jurisdiction to
    27  be invalid, such judgment shall not affect,  impair  or  invalidate  the
    28  remainder thereof, but shall be confined in its operation to the clause,
    29  sentence,  paragraph,  section  or part thereof directly involved in the
    30  controversy in which such judgment shall have been rendered.
    31    § 4. This act shall take effect on the ninetieth day  after  it  shall
    32  have become a law.
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