New Tax Targets High-Value Properties
Mayor Zohran Mamdani of New York City has introduced a new tax targeting luxury homes that are not primary residences. The pied-à-terre tax took effect on July 1. The initiative aims to enhance housing affordability. Property owners affected by this surcharge will notice it in their tax bills due January 1, 2027.
The New York City Department of Finance (DOF) recently notified property owners who might be subject to the tax. Owners of residential houses or condominiums who believe they are exempt must file for exemptions by August 21. Cooperative apartment owners have until August 24.
A public database now lists properties potentially subject to the tax. This move has sparked opposition. Some claim the list wrongly includes properties that might never pay the surcharge. Privacy concerns have also been raised. City Council Minority Leader David Carr criticized the release, noting many included properties might qualify as primary residences or have owners who dispute inclusion successfully.
Understanding the Pied-à-Terre Tax
The tax affects high-value second homes in New York City. It applies to non-primary residences, specifically:
- One-, two-, and three-family homes valued at over $5 million.
- Condominium and cooperative units valued at $1 million or more.
The surcharge does not apply to primary residences. The rate depends on property type and value:
- For homes valued between $5 million and $15 million, the tax is 0.8 percent.
- Homes valued between $15 million and $25 million incur a 1.05 percent rate.
- Properties valued at $25 million or more face a 1.3 percent tax.
- Condos and co-ops are taxed at 4 percent for values between $1 million and $3 million.
- Units valued between $3 million and $5 million face a 5.25 percent charge.
- Properties over $5 million are taxed at 6.5 percent.
Officials predict the tax will raise approximately $500 million annually from 13,000 properties. However, New York City Comptroller Mark Levine expects lower yields between $340 million and $380 million annually. The funds will support housing initiatives.
The debate over taxing high-value second homes in New York City has existed for years. Supporters believe that owners of multimillion-dollar second homes should contribute more to resolving housing issues. Critics argue the tax might deter investment or push wealthy residents to states with lower taxes.
Implications for Celebrity Homeowners
The city’s list includes thousands of properties that might face the surcharge. Being listed doesn’t automatically mean an owner will pay the tax. Owners can claim exemptions if their home serves as their primary residence or meets other city criteria. Notable figures on the list include:
Film, Television, & Theater
- Alan Cumming
- Darren Aronofsky
- John Leguizamo
- Matthew Modine
- Joel Coen
- Spike Lee
- Others
Music
- Valerie Simpson
- Keith Richards
Fashion
- Anna Wintour
- Carolina Herrera
Art & Gallerists
- Frank Stella
- Bruce Nauman
Authors & Literary Figures
- Calvin Trillin
- Min Jin Lee
Journalists & Media
- Fareed Zakaria
- Sarah Ellison
Politics, Government & Public Service
- Anthony Fauci
- Bill de Blasio
Sports
- Derek Jeter
- Earl Campbell
Business
- Michael Dell
- James Dolan
Mayor Mamdani argues for shifting more of the tax burden to wealthy part-time residents. He notes many luxury homes remain empty most of the year while benefiting from city services. The exact number and final revenue impact of those who will pay the surcharge remain uncertain.