New York City’s wealthiest part-time residents are about to get a new tax bill.
According to The Wall Street Journal, state lawmakers approved a tax on luxury second homes in New York City Wednesday. The pied-à-terre tax, passed as part of the state budget, targets properties valued at $5 million or more and is expected to generate as much as $500 million annually in new revenue, though some analysts project the figure could be closer to $350 million. It takes effect July 1.
Gov. Kathy Hochul’s office estimates roughly 10,000 homes would be subject to the levy. Hochul, a Democrat who had publicly opposed broad tax increases on high-income earners, introduced the measure as what observers characterized as a compromise with New York City Mayor Zohran Mamdani, a democratic socialist seeking new revenue to address the city’s $5.4 billion fiscal deficit and fund an affordability agenda.
Mamdani has said he expects the city to balance its budget through cost savings, additional state assistance and the new tax.
Qualifying properties could owe tens of thousands of dollars annually at the low end of the threshold. At the high end, properties such as a Manhattan penthouse purchased by Citadel founder Ken Griffin in 2019 for roughly $238 million could face annual bills of $1 million or more. Griffin has publicly criticized the measure and said Citadel would prioritize growth in Miami over New York City.
New York joins a wave of Democratic-led states targeting high-value property and high incomes. Washington state and Maine each approved new taxes on millionaires earlier this year. Massachusetts voters in 2022 approved a 4 percent surtax on annual income over $1 million, and Rhode Island has a similar measure taking effect this summer on vacation homes valued at $1 million or more.
The city’s Department of Finance will determine which residences qualify as second homes and calculate their market value under the new law.
