New York City Mayor Zohran Mamdani and Governor Kathy Hochul have proposed a new tax on luxury second homes valued at $5 million or more, targeting non-resident owners. The "pied-à-terre tax" aims to generate at least $500 million annually to help close the city's $5.4 billion budget deficit. The tax would apply to one- to three-family homes, condos, and co-ops where the owner's primary residence is outside New York City.
Mamdani highlighted the tax as a fulfillment of his campaign promise to tax the wealthy, citing examples like hedge fund CEO Ken Griffin's $238 million penthouse. Griffin, who moved his firm's headquarters to Florida in 2022, was singled out in a video announcement. The mayor's office argues the tax targets billionaires and global elites who use New York real estate as a store of wealth rather than a primary residence.
The proposal has not yet been approved by the state legislature. Critics warn the tax could drive wealthy residents out of the state, while supporters argue it ensures fair contributions from ultra-wealthy non-residents. Mamdani dismissed concerns about an exodus, citing past tax increases that did not lead to a decline in millionaires. The revenue would fund initiatives like free childcare, cleaner streets, and safer neighborhoods.
Countries including France, the United Kingdom, and Canada already impose similar taxes on non-primary residences. The measure is part of Mamdani's broader effort to address affordability and racial equity in the city.