NYC comptroller gives thumbs up to proposed pied-à-terre tax, with some caveats
New York City Comptroller Mark Levine is giving a thumbs up to Gov. Kathy Hochul and Mayor Zohran Mamdani's proposed pied-à-terre tax, which would target second homes valued over $5 million.
Levine agreed that the tax could indeed raise $500 million, as Hochul and Mamdani estimated. However, that comes with several caveats.
What the comptroller found
The comptroller released a detail report examining the potential revenue from the tax.
"We find that ... our choice of tax rates and brackets could raise almost exactly $500 million from a little over 11,200 properties," Levine wrote in his report.
That said, there are a number of variables that could make that estimate fluctuate substantially, the comptroller found. Those variables lower the estimated income to a range of $340-380 million.
They also include exemptions for properties that have been rented out, co-op and condo valuations, how two- and three-family homes are treated, and how the pied-à-terre tax might change the behavior of the impacted homeowners. Another factor is how properties owned by LLCs or trusts might be treated.
"Each of these decisions can shift collections by tens of millions of dollars," the report found.
"Comptroller Levine's analysis is yet another confirmation that a tax on second homes would not deliver the tax revenue expected. This proposed tax also presents significant logistical issues as to how you identify second homes, value co-ops and condos, and account for changes in taxpayer behavior. If implemented haphazardly, this tax would result in less investment, less housing and less revenue for the city, state and MTA," Real Estate Board of New York president James Whelan said.
The comptroller's report was released on the same day Hochul was set to meet with hedge fund owner Ken Griffin. Mamdani has made Griffin the poster boy for his tax-the-rich campaign. Griffin owns a $238 million penthouse on Central Park South that Mamdani wants to tax.
In response, Griffin's company Citadel hinted they may nix a $6 billion plan to redevelop 350 Park Ave. They said that project would lead to 6,000 construction jobs and 15,000 permanent jobs.
Hochul says the tax won't target NYC residents
"It is not a tax on residents. That is so important. We're talking about people who are ultrawealthy. I mean, there are literally Russian oligarchs buying up properties, driving up the property values," Hochul previously said.
Hochul supports the pied-à-terre tax as a counter to proposals Mamdani has made to raise income and corporate taxes on the weathiest people and companies. Mamdani has said the city is confronting a $5.3 billion budget gap, and unless it is closed with assistance by the state, that he'll raise property taxes.
New York City Council Speaker Julie Menin and Adrienne Adams, Hochul's running mate and Menin's predecessor, also support the pied-à-terre tax.
