Important Update NY Anti-Fix & Flip Legislation (S.3060-E/A.5375-A}
On behalf of the National Private Lender’s Association (NPLA), Private Lender Law (PLL) has reviewed Governor Cuomo’s 2020 Executive Budget Address delivered on January 21, 2020 and its possible impact on the pending anti-fix & flip legislation and political landscape in New York State in order to evaluate the likelihood of its passage.
Bill Description and Impact
As a reminder, New York Senate Bill S3060E (identical to A.5375-A), or ”The New York state small home anti-speculation act” aims to impose a 15-20% additional conveyance tax on 1-5 separate residential units located in certain parts of New York City, if transferred within two years of the prior transfer of such property. If transferred in less than one year the tax shall be 20%, and if transferred between 1-2 years the tax shall be 15%.
The effect of such legislation would
- Decrease lending activity in the affected areas resulting in a loss of business for private lenders and the reduction of real estate transactions;
- Decrease jobs for those in the building trades;
- Decimate recovery of blighted/vacant housing;
- Raise taxes on NY resident’s when they sell their homes; and
- Become a catalyst bill for other state’s around the country.
The bill is currently tabled until later in 2020. Conversations with Julia Salazar (D) 18th, Senate District, indicate that she will continue to sponsor the passage of the bill. The New York Association of Realtors, which opposes the bill, believes the bill has a chance of passing.
Analysis of Governor’s 2020 Executive Budget Address
As previously communicated by the NPLA, Gov. Cuomo’s budget outlines a $6 billion dollar budget gap for 2020. THAT BEING SAID, AFTER REVIEWING THE PROPOSED 2020 BUDGET, THERE ARE NO OUTWARD TAX INCREASES INCLUDED IN THE PROPOSED BUDGET. This is a very good sign for the NPLA’s (and private lending industries) position against the pending bill, which is a call for increased taxes.
As this is only the beginning of NY’s budget process, the NPLA and PLL will continue to engage NYS elected officials with meaningful discussions on the pending bill and report back accordingly.
Should you have any further questions on this email or would like to discuss another matter, please contact me at (212) Lend Law 536-3529 or at jhornik@privatelenderlaw.com.
