New York Passes Pied-à-Terre Tax Targeting Billionaires' Second Homes Worth $5M+

New York has officially enacted a pied-à-terre tax on multimillion-dollar second homes in New York City, folded into the state budget signed roughly two months behind schedule. The levy targets properties worth over $5 million owned by people who don't use New York City as their primary residence — think billionaires and the ultra-wealthy who park cash in Manhattan penthouses but pay little or no city income tax. Gov. Kathy Hochul and NYC mayoral candidate Zohran Mamdani jointly championed the measure, estimating it could generate up to $500 million annually, though real-world revenue may fall short of that figure.

The tax is tiered by property value: single-family homes between $5 million and $15 million face a 0.8% annual surcharge, those between $15 million and $25 million pay 1.05%, and properties valued at $25 million or more are hit with 1.3%. Because the city's Department of Finance assessed values typically run far below actual market prices, co-ops and condos assessed at $1 million or more are also covered — with higher initial rates of 4%, 5.25%, or 6% during a two-year transition period while a new valuation system is developed. The tax is set to run through 2031, when it must be renewed by the legislature.

Around 10,000 properties are expected to fall under the new rule. Mamdani made the announcement in front of a Central Park South limestone tower where Citadel CEO Ken Griffin purchased a $238 million penthouse in 2019. That deliberate targeting provoked a sharp reaction: Griffin threatened to scrap a planned New York office for Citadel and pledged to double down on Miami, calling the move a signal that New York doesn't welcome success. Investors Bill Ackman and Jason Calacanis also publicly attacked the tax. Other prominent names likely affected include Jeff Bezos and Michael Dell.

The policy represents a careful political compromise: Hochul has blocked broader income or corporate tax hikes on high earners, but allowed this more narrowly targeted wealth levy to pass as a budget gap filler. Homeowners will receive notification by August 30 and can contest the designation by submitting proof of primary residency.