New York Governor Kathy Hochul has proposed a new tax (the rate has not yet been announced) on homes worth more than $5 million that are not used as primary residences.
The tax, targeting ultra-wealthy owners who do not live in New York and purchase city properties as investments or as a means of “storing wealth,” is expected to bring in $500 million annually for the city, helping to close a $5.4 billion budget gap.
The measure was backed by Mayor Zohran Mamdani, who cited as an example a luxury apartment purchased by Citadel founder Ken Griffin for $238 million in Manhattan that remains vacant. “This is something worth celebrating… the introduction of a proposal that would generate half a billion dollars every year by taxing the richest of the rich,” he said.
As an example of such a property, Mamdani cited the apartment purchased by Citadel founder K. Griffin for $238 million in Manhattan, which remains vacant.
Mamdani had campaigned on a promise to tax the wealthy in order to make the city more affordable, but he had usually faced opposition from Hochul, who had resisted tax increases ahead of her reelection bid.
In this case, however, the governor said in a statement that “if someone can afford a $5 million second home that sits empty most of the year, then they can contribute like every other New Yorker.”
There has also been backlash against the proposal. The Real Estate Board of New York argued that it “could harm the city’s economy without solving its long-term fiscal problems.”
Source: Reuters
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