Wealthy New York property owners are criticizing Mayor Zohran Mamdani's proposed tax on luxury second homes, arguing the policy could hurt investment and push more high earners toward cities like Miami.
The proposed levy would apply to second homes worth more than $5 million. According to New York Governor Kathy Hochul, the tax would affect around 13,000 properties, or roughly 0.4% of the city's housing units, and could generate about $500 million annually.
Several wealthy homeowners told the Financial Times they were frustrated by what they described as growing hostility toward rich residents. FT reported that advisers and attorneys were already receiving calls from wealthy clients seeking ways to reduce the potential impact of the proposed levy, even before final details of the plan had been released.
The proposal would affect several high-profile luxury properties, including Ken Griffin's $238 million apartment at 220 Central Park South, which Mamdani used as the backdrop for a campaign video promoting the tax.
Griffin, Investors Warn About Capital Flight
Griffin recently criticized Mamdani's campaign video at the Milken Institute Global Conference, calling it "creepy and weird."
Griffin said Citadel would "double down" on Miami while continuing to evaluate long-term expansion plans in New York. Citadel executives have also warned that the company could reconsider its involvement in the planned $6 billion redevelopment of 350 Park Avenue.
Citadel and affiliated employees paid roughly $2.3 billion in New York state and city taxes over the past five years.
Budget Pressure Drives Tax Debate
Mamdani has argued that higher taxes on wealthy residents are needed to help close New York City's $5.4 billion budget gap over the next two fiscal years.
The mayor previously warned the city could otherwise face a 9.5% property tax increase and reserve drawdowns if Albany does not support broader tax increases on wealthy residents and corporations.
The broader debate mirrors national arguments over wealth taxes. Venture capitalist Chamath Palihapitiya recently warned, in comments, that California's proposed "billionaire tax" could eventually expand beyond ultra-wealthy residents.
