Mamdani's tax on 2nd home luxury real estate market

Mamdani's pied-à-terre tax is one month old — and Manhattan's luxury market is already paying the price

Mayor Zohran Mamdani's new tax on high-end second homes took effect July 1, and real estate brokers say it is already freezing buyers, inflating the luxury rental market, and pushing wealthy purchasers out of New York City altogether.

A month into the policy, the picture emerging from Manhattan's brokerage offices is blunt: international buyers are walking away from signed deals, sellers are listing properties they once planned to keep, and six-figure-a-month rental units are filling up with people who would have bought if the city had not added a new annual bill on top of already steep property taxes.

The tax applies to second homes valued above $5 million, starting at a 4-percent annual rate and climbing to 6.5 percent under the first phase of the plan. A second phase, set for the 2028, 29 tax year, will change how the levy is calculated, details the city has not yet made public.

The policy's supporters frame it as a way to make billionaire absentee owners pay their share. But the brokers who move these properties every day describe something different: a market recoiling from a tax that adds hundreds of thousands of dollars in annual carrying costs to units that already generate enormous revenue for the city treasury.

A Madrid buyer walked away from an $8.9 million condo in eleven days.

Read more...