New York state lawmakers voted Wednesday to impose a new tax on nonprimary residences in New York City, a levy that will more than double the property tax bills of many wealthy luxury apartment owners and is projected to raise $500 million to help close the city's yawning budget gap. The pied-à-terre tax, championed by Mayor Zohran Mamdani, targets condos and co-ops valued at $1 million or more that are not used as a primary residence, and it has already provoked a public confrontation with one of the wealthiest men in America.
Citadel founder and CEO Ken Griffin, a Florida tax resident who owns a 24,000-square-foot penthouse at 220 Central Park South purchased in 2019 for a record $238 million, has become the face of the fight. Mamdani posted a video in front of Griffin's penthouse announcing the tax, and Griffin responded by threatening to pull business and jobs out of New York.
The stakes are real, for Griffin, for the city, and for every taxpayer who will feel the downstream consequences if the tax drives capital and employment out of Manhattan rather than filling the budget hole Albany and City Hall promised it would.
The new levy rolls out in two phases, as CNBC reported. For the 2026, 2027 and 2027, 2028 tax years, the city will apply tiered annual rates based on existing Department of Finance property valuations: 4% on properties valued between $1 million and $3 million, 5.25% on those between $3 million and $5 million, and 6.5% on properties above $5 million.
Starting in the 2028, 2029 tax year, the system shifts. The city plans to revalue condos and co-ops on a comparable-sales basis, a method that should bring assessed values much closer to actual market prices. Tax experts cited by CNBC note that current city valuations often land at 10% or less of a property's true market value. Once that gap closes, the rates drop but the assessed base balloons. The adjusted rates: 0.8% on properties worth $5 million to $15 million, 1.05% on those between $15 million and $25 million, and 1.3% on properties above $25 million.
The math is not abstract. Robert Pollack, a property tax attorney with Marcus and Pollack LLP, calculated the impact on Griffin's 220 Central Park South penthouse. The city currently values that property at $15.5 million, a fraction of the $238 million Griffin paid. Under the first phase, Griffin's annual property tax bill on that unit alone would jump from $858,332 to roughly $1.87 million. Once the comparable-sales valuation kicks in for 2028, 2029, the bill climbs to just under $4 million.
Griffin also owns two apartments at 740 Park Avenue, purchased for a combined $83 million. Those units would carry an additional $1.1 million in tax starting in 2028, 2029. His total Manhattan property tax bill would exceed $5 million a year.
Pollack did not mince words about the complexity or the burden. "It's incredibly complicated," he told CNBC. He added:
"All my clients already feel like they pay too much. These numbers are significant. I don't care how wealthy you are."
Mayor Mamdani has made no secret of his intentions. When he announced the tax, he did so with a video filmed in front of Griffin's penthouse, a piece of political theater that turned a policy debate into a personal confrontation. Fox News reported Mamdani's remarks after the tax was announced: "When I ran for mayor, I said I was going to tax the rich. Well, today, we're taxing the rich." He called the existing system "fundamentally unfair" and said it "hurts working New Yorkers."
The revenue, city officials said, would fund public services including childcare, street cleaning, and public safety.
That framing, the ultra-wealthy paying their "fair share", is familiar enough. But the fierce backlash Mamdani drew after his viral video suggests the political calculation is riskier than he let on. Singling out a specific taxpayer by name and filming in front of his home is not a revenue strategy. It is a populist stunt, and it carries consequences.
Griffin fired back by threatening to pull business and jobs from New York. A CNBC video headline captured his posture: "We will create jobs in Miami as a consequence of NYC Mayor Mamdani's wealth tax video." Griffin is already a Florida tax resident, and Citadel has been expanding its Miami footprint for years.
The threat is not hollow posturing. Newsmax reported that Citadel COO Gerald Beeson defended Griffin's contributions and warned the company may reconsider its $6 billion Midtown Manhattan redevelopment project at 350 Park Avenue, a project that would create 6,000 construction jobs and more than 15,000 permanent positions. Beeson stated that Citadel principals and team members have paid nearly $2.3 billion in city and state taxes over the past five years.
"It is shameful that he used Ken's name as the example of those who supposedly aren't carrying their fair share of the burdens associated with New York City's often costly and wasteful spending."
That was Beeson's assessment. And the implicit question he raised, whether New York's political class can afford to antagonize the very taxpayers and employers it depends on, is one Mamdani has yet to answer convincingly.
The city projects the pied-à-terre tax will generate $500 million in revenue. But that number is already under challenge. City Comptroller Mark Levine released a study estimating the tax would produce only $340 million to $380 million, as the New York Post reported, a gap of $120 million to $160 million from the headline figure.
Levine's analysis warned that wealthy owners would not simply absorb the new costs. They would respond, by selling properties, converting second homes to rentals, claiming relatives as primary residents, or relocating entirely. The comptroller's study cited Vancouver's comparable tax as a cautionary example: after that Canadian city imposed its own levy, vacant homes dropped 60% as owners sold or rented out their units.
The behavioral response, Levine's study warned, could cost New York City $38 million to $42 million annually in lost revenue from departing owners. The study projected that conversions to rental, primary-residence claims, sales, and legal challenges could produce $88 million to $133 million in revenue losses.
Levine's own words were measured but pointed: "The revenue loss from behavioral changes could compound over time." In other words, the tax may not just underperform, it could actively shrink the city's tax base.
This is the pattern that critics of Mamdani's broader tax agenda have warned about for months. Wealth is mobile. Capital goes where it is treated well. New York is not the only city in the world with office towers and penthouses.
The pied-à-terre tax did not emerge in a vacuum. Mamdani has described the city's fiscal situation as historic, and he turned to Albany for a rescue after delaying the city's own budget deadline. The tax is part of a broader budget plan to close the gap, but the details of that plan, and the spending it is meant to sustain, remain largely unexamined in public debate.
What is examined, in granular detail, is the bill being handed to property owners. The tax structure itself reveals how disconnected city valuations have been from reality. A penthouse purchased for $238 million carries a city valuation of $15.5 million. That gap, roughly 93%, is not a quirk. Tax experts say it is systemic. The 2028, 2029 comparable-sales overhaul is meant to close it, but the details of how comparable properties will be selected, weighted, and contested remain unclear.
Enforcement mechanisms are also unspecified. The legislation does not appear to address how the city will verify primary-residence claims, prevent ownership restructuring to avoid the tax, or handle legal challenges. These are not minor administrative details. They are the difference between a functioning tax and a leaky one.
Nor does the legislation clarify exemptions or carve-outs. It is unclear whether any property types or categories are shielded from the levy. For a tax described as targeting the ultra-wealthy, the $1 million threshold is low enough to catch a significant number of middle-tier co-op and condo owners in Manhattan, a borough where a one-bedroom apartment can carry that valuation.
Mamdani's record on property policy has already drawn scrutiny. His plan to hand buildings to tenants relied on city programs with long track records of failure. His earlier property tax hike proposal drew enough backlash that he was forced to retreat under pressure from taxpayers. The pattern is consistent: ambitious revenue promises, thin implementation details, and a political instinct that treats wealth as a problem to punish rather than a resource to retain.
The first phase of the tax takes effect for the 2026, 2027 tax year. Property owners, tax attorneys, and real estate professionals will spend the next several months calculating exposure and weighing options. Some will pay. Others will sell, restructure, or leave.
Griffin's case is the most visible, but it is not the most important. The real test is what happens at the margins, the hedge fund manager who was considering a New York office, the foreign buyer weighing a Manhattan apartment, the developer deciding whether to break ground on a luxury project. Those decisions are made quietly, and their effects show up years later in tax receipts, job numbers, and vacancy rates.
The comptroller's warning is worth taking seriously. Vancouver tried this. Owners adapted. Revenue fell short. New York is betting it will be different, but the city has offered no evidence for why.
You can film a video in front of a billionaire's penthouse and call it justice. But when the jobs move to Miami and the tax base shrinks, the people left holding the bag won't be billionaires. They'll be the New Yorkers who can't leave.
