Governor Kathy Hochul’s (D-NY) proposed tax on luxury second homes in New York City would be rolled out in two phases as state officials work through the city’s complicated property valuation system, according to a New York Times report published Thursday.
The proposal would initially apply to second homes with at least $1 million in assessed “market value,” though the actual sales value of those properties could be far higher. Hochul’s office said a property with a $1 million assessed market value could translate to roughly a $5 million sales price.
For the first two years, qualifying second homes would face an additional tax surcharge between 4% and 6.5%. After that, the city and state plan to move toward a different valuation system based more directly on estimated sales prices. In the second phase, homes valued at over $25 million could face a 1.3% tax.
Revenue Goal
Hochul’s office said the proposed tax is expected to raise about $500 million annually to help address New York City’s budget deficit. Jen Goodman, a spokeswoman for Hochul, told The New York Times that the goal is to ask “some of the wealthiest people in the world to contribute a bit more” while avoiding broader damage to New York’s tax base.
Investor Backlash
The proposal has already triggered pushback from investors, developers and wealthy homeowners.
Earlier this month, Billionaire investor Ken Griffin criticized New York Mayor Zohran Mamdani over a campaign-style video filmed outside Griffin’s $238 million apartment at 220 Central Park South promoting the tax. Griffin called the video “creepy and weird” and warned that New York was becoming less welcoming to wealthy investors and businesses.
Citadel executives have also warned that the company could reconsider involvement in the planned $6 billion redevelopment of 350 Park Avenue as tensions around the proposed tax continue to escalate.
Investor Kevin O’Leary also criticized the proposal last month, arguing that luxury second-home owners generate construction activity, property tax revenue and related economic spending while placing little strain on city services.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
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