The New York City Council has approved a tax on non-primary residences, particularly targeting luxury apartment owners. This pied-a-terre tax will apply to properties valued at $1 million or more, with rates escalating based on property value: 4% for homes valued between $1 million and $3 million, 5.25% for those between $3 million and $5 million, and 6.5% for properties exceeding $5 million.
Experts note that the city's outdated property assessment system often undervalues these homes, which may mitigate the immediate financial impact.
Starting in the 2028-2029 tax year, property valuations will be adjusted to reflect market sales, leading to lower tax rates: 0.8% for properties between $5 million and $15 million, 1.05% for those between $15 million and $25 million, and 1.3% for properties over $25 million.
High-profile billionaire Ken Griffin, who owns a penthouse in Manhattan, has publicly criticized the tax, indicating it would more than triple his property tax bill. This tax could create significant financial strain for wealthy property owners and may influence their decisions regarding residency and investment in New York City