Topline
New York lawmakers are finalizing the state’s budget, which is set to include a pied-à-terre tax that aims to impose levies against secondary single family homes in New York worth $5 million or more, and could go into effect as soon as July 1, according to Bloomberg.
New York lawmakers will vote on the tax Wednesday.
Photo by Gary Hershorn/Getty Images
Key Facts
New details about the proposed tax, which has been a flashpoint between Mayor Zohran Mamdani and billionaire Ken Griffin, were originally reported by Bloomberg citing draft legislation.
New York’s state legislature will vote on the measure Wednesday.
Under the proposal, second co-ops and condos with a market value of $1 million or more would be taxed between 4% and 6.5% during the first two years of the tax being rolled out, according to multiple reports.
A 0.8% to 1.3% surcharge would be paid by secondary single family homes with market values of $5 million or more, Bloomberg added.
Following the first two years of the tax’s rollout, a uniform tax rate would be placed across all single family homes, co-ops and condos—with a 0.8% rate paid by homes worth $5 million to $15 million, a 1.05% rate paid by homes worth $15 million to $25 million and a 1.3% rate paid by homes worth $25 million.
Tax Exemptions
Property owners included in the pied-à-terre tax will be notified by Aug. 30, Bloomberg reported, adding owners will be able to contest their inclusion and that New Yorkers who mainly live in the city will be exempt as lawmakers have framed the tax as a way to target property owners who are not full-time New York City residents. Exemptions also include properties occupied by immediate family members of the property owners and properties leased out as rental units.
The Difference Between Market Value And Assessed Sales Value
The market value for a property is the estimated value it would sell for in the real estate market, while assessed value is a valuation determined by a local tax assessor to calculate annual property taxes. New York Gov. Kathy Hochul’s office has claimed a $1 million market value is equal to sales value of about $5 million, The New York Times reported, though it found the difference between those values is usually more pronounced than what the governor has said, noting a Midtown Manhattan penthouse with a $4.2 million market value this year sold in 2024 for over $135 million.
Tangent
A first-of-its-kind 1% tax on homes worth more than $1 million that are purchased with cash was floated by lawmakers earlier this month but was not included in the draft legislation reported by Bloomberg.
Key Background
New York City Mayor Zohran Mamdani announced the pied-à-terre tax last month in a video recorded outside hedge fund billionaire Ken Griffin’s New York City penthouse. The mayor said the tax would target, “Those who store their wealth in New York City real estate, but who don’t actually live here.” Mamdani also proposed a 9.5% property tax hike that he later nixed amid backlash from homeowners and the city council, placing his focus on the pied-à-terre tax that has garnered backing from Hochul, who estimates the measure will raise $500 million. President Donald Trump and Griffin, whose estimated net worth is $50.7 billion, blasted Mamdani this month over the pied-à-terre tax. Griffin said the measure might put a $6 billion expansion in New York City spearheaded by his hedge fund in jeopardy, with Trump saying losing “people like Ken… would be a big loss for New York.”
Further Reading
Trump Suddenly Blasts Mamdani Over Pied-À-Terre Tax—A Surcharge On $5 Million Secondary Homes (Forbes)
Trump Warns Mamdani Over Property Tax Hikes—Amid Mayor’s Spat With Billionaire Ken Griffin (Forbes)
Ken Griffin’s Citadel Suggests $6 Billion NYC Project May Be At Risk Over Mamdani Tax (Forbes)
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