04/17/2026
Mamdani pushes pied-a-terre tax on homes valued above $5m!
A couple days ago proposed a tax on owners of second homes in NYC valued above $5m, notably with the support of . The proposed rate structure would be based on a 2019 proposal that included a sliding scale from 0.5% on properties valued $5–6 million and up to 4% on properties valued above $25 million. Notably different would be an inventory type differentiation, with townhouses taxed at .5%–4% of market value above $5m, and condo / co-ops 10%–13.5% of assessed value above $300k. The distinction is important: the assessed value of apartments for tax purposes is usually around only 4% of their actual market value. Meaning the owner of a condo will have a fraction of the pied-a-terre tax liability as the owner of a townhouse. This is a fundamental flaw in the structure of the proposal as it currently stands and is likely to draw scrutiny in Albany. The tax is projected to affect around 13,000 homeowners and raise around $500m annually. This is less than 10% of the $5.4B budget deficit Mamdani inherited from his predecessor, but every little bit helps.
The Mayor made his announcement video in front of Ken Griffin's $238m penthouse purchased in 2019, which would incur an additional annual tax liability of around $1.1m as the proposal is currently written.
To discern the effect this additional tax is likely to have on the luxury submarket, Griffin's home is a useful example. A $1.1m tax liability increase would nearly double his amortized fixed-cost monthly outlay (RE tax + common charges). This would undoubtedly cause a value contraction for the average-priced apartment. But... when Griffin purchased the home in 2019 he himself readily admitted it would never appraise near what he bought it for. It wasn't a value purchase, it was a vanity purchase. Luxury pied-a-terre owners don't buy for the same reason one might invest in a treasury bond or mutual fund, they do so for the same reason they might buy fine art or a classic car. They're spending a smaller percentage of their income and net worth on their purchase than the average NYC buyer (Griffin's 2019 purchase amounted to only 14% of his annual income), and their real estate purchase decision-making process isn't likely to depend much on any perception of market value.
The NYC luxury market has just completed it's third fiscal quarter in a row of banner-performance, all after the next mayor and his policies were a foregone conclusion. Luxury buyers' current financial position has never been better. Continuing to use Griffin as an example, he just closed on another NYC luxury real estate purchase, his second home at 740 Park Ave specifically, for $38m... almost double what the seller paid for it in 2019.
