Heather Domi testifies on unintended consequences and valuation flaws

Hi, my name is Heather Domi.

I am a resident of District 1, and I'm very grateful to be here today.

I am a real estate broker, have been for 20 years, and I'm grateful to the committee here, council members, for taking this issue with such seriousness and personally.

I'm going to talk about the unintended consequences because we haven't gotten to any of that, and that's really important.

And I do want to make sure we don't lose fact that this was meant to target homes above $5 million.

And as Leonard Steinberg pointed out, the estimated market value of $1 million is what tends to get swept up in the conversation, and we're losing fact that this was meant to target above $5 million.

There is an inequality in our system of estimated market value, point-blank examples of an apartment at 15 Central Park West that closed for $21 million

in June and a $3 million condo on the Bowery that closed for $3 million in May.

The property that is seven times the amount of the other one has a lower estimated market value than the $3 million property.

So the system is so incredibly flawed in the way that it is valuing these properties that it is targeting all of the wrong people.

We are targeting, this is targeted retired people.

This is targeted people who have bought from deceased trusts.

So there's no one to claim residency for the January 5th date.

People going through renovations who are here full time, but they can't claim residency to the property because it's unlivable, uninhabitable.

Owners who have rented their properties out, they've made investments in our city and paid taxes for years, and they put tenants in their property who have long-term leases.

Maybe those people aren't full-time residents, but guess what?

They're stuck in a lease with a person who's not a full-time resident, so now they're going to have to also pay the pied-a-terre tax on that.

So the unintended consequences and the cases are so wide and so vast.

A client who's retired, exited the city, selling their property, and now they have to contest the tax, but by the time the property sells and closes, they will no longer own it.

Will the city honor the fact that this property isn't worth more than $5 million and that they sold the property, and will they get credited back that?

So there's so much uncertainty, so much fear that has been created within.

New Yorkers who have lived here, invested here, that it really has to be looked at.

So many different cases, trusts that weren't set up with this tax in mind, LLCs with joint partners that own.

33, 33, 33%.

This structure and the cases need to be examined very closely.

Thank you.

Don't forget about the in-laws.

In-laws, too.

Go ahead.