Banks said the revenue would not be able to support the MTA as planned, because the tax would be variable in nature. As it's implemented, sales would be expected to decrease. There would not be a consistent revenue stream. Thus, there would not be the level of stability required to bond at the MTA.

The proposal interferes with how property tax is calculated, according to Banks. “It changes the way property is going to be taxed from an assessment base which is the current system to a sales base which is not part of the city's property tax system,” Thus, REBNY questions whether the tax would even be legal.

New York City already has an over abundance of high-end condominiums on the market and this will contribute to that situation. REBNY predicts that the tax will discourage sales which could interfere with generating the necessary revenue to support the underlying financing of buildings. “We're concerned there will be bankruptcies and defaults, which will have a significant negative impact on the economy,” Banks said.

As a recurring tax, it differs from various stamp taxes around the globe. For example, in the UK, buyers must pay a stamp duty land tax on property costing more than £125,000. Banks differentiated those taxes stating, “Most of them are a one-time transaction tax. So you know going into the purchase decision what your liability is going to be.” People can adjust their offer on the sales prices to compensate for the tax. He further pointed out the value of property can rise subjecting people to taxes they never anticipated with their initial decision to purchase.

“This is not something that was well thought-out and put before the public with months to chew on and to analyze,” said Banks. He noted the tax came about when the revenue from marijuana legalization was pulled from the table, and “they needed to fill a hole in the budget.”