New York State lawmakers approved a new pied-à-terre tax targeting second homes valued at $1 million or more, aiming to generate at least $500 million in revenue starting this year [1, 2]. The tax applies in two phases. For the fiscal years 2026-2027 and 2027-2028, it uses current city Department of Finance property valuations, which often undervalue luxury properties at 10% or less of market price, to calculate tax bills. From 2028-2029 onward, updated valuations and lower tax rates will take effect [1, 3].

During the initial years, condos and co-ops valued from $1 million to $3 million will face a 4% tax rate. Properties valued between $3 million and $5 million will pay 5.25%. Those over $5 million will pay 6.5% under the current valuation scheme [1]. After updated valuations, the rates drop significantly: 0.8% for $5 million to $15 million, 1.05% for $15 million to $25 million, and 1.3% for properties over $25 million [1, 3].

A high-profile example illustrating the tax’s impact is Citadel CEO Ken Griffin’s 24,000-square-foot penthouse at 220 Central Park South. Purchased in 2019 for $238 million, the city currently values the property at $15.5 million. Under the new tax, Griffin’s annual property tax bill on this penthouse would more than triple [1, 3].

Griffin relocated Citadel’s headquarters to South Florida in 2022 and has indicated he may reduce or withdraw business from New York due to the tax. He described Mayor Zohran Mamdani’s Tax Day video highlighting the tax by Griffin’s residence as "creepy and weird," adding Mamdani "has made it very clear—New York does not welcome success" [1, 3, 2]. Mamdani said he has reached out to Griffin, stating, "I'm willing to meet with any and all business leaders across the city," but has yet to receive a response [2].

Public opinions on the tax diverge. Billionaire Jeff Bezos praised it as a "fine thing for New York to do." Others, including investor Bill Ackman, entrepreneur Jason Calacanis, and former President Donald Trump, oppose the measure [3].

Mayor Mamdani first spotlighted the new tax with a video posted on May 26 standing outside Griffin’s penthouse, a day before the state budget passed the measure on May 27 [1, 2]. The tax structure will begin affecting properties this fiscal year and will transition to updated valuations and rates starting 2028-2029 [1, 3].