Posted by Leonard Steinberg on October 8th, 2013

I had an interesting meeting earlier to-day with a group of international real estate leaders to gauge the current state of affairs in global ‘real estate land’: one message emerged that is truly of great concern, especially now as we enter the last phase of the New York mayoral election campaign.

Governments have an uncanny ability across the globe (yes, even in Switzerland) to strangle real estate markets. Their righteous actions (usually to buy votes while ignoring corruption and inefficiencies ) result in weakened real estate markets that simply produce less revenue for all, achieving the exact opposite of their intentions. Excessive capital gains taxes (up to 50%)in France have resulted in Sellers insisting on higher selling prices to offset these high taxes: The result?  Buyer resistance has slowed transaction volume to a crawl. In Switzerland, surely the seat of capitalism, restrictions on ownership of secondary homes has literally halved the value of many ski-resort properties and slowed trade.

There are many more examples: now as we evaluate Mayoral candidates in New York, we have to be clearly aware that the ultra-righteousness that comes from politicians to garner votes usually hurts voters ultimately. A bad economy is bad for everyone, especially those with the least. Before we start raising tax rates in New York, lets first distribute the burden more equitably. Knowing what we know from other countries, lets not introduce laws that do the exact opposite of their intent.