Critics Warn of Impact from Hochul’s Proposed Tax

Opponents of Governor Cathy Hochul’s plan to impose a pied-à-terre tax on high-end second homes argue that it could have repercussions not just for the wealthy, but also for hardworking families and retirees living in the same buildings.

Management at Manhattan House Condominiums—a notable luxury building at 200 East 66th Street—recently dispatched a letter to state Senator Liz Krueger and other voters expressing their discontent with the proposal. Interestingly, Democratic Socialist Mayor Zoran Mamdani is a strong advocate for this tax.

Building regulators are cautioning that the proposed surcharge on second homes valued over $5 million could lead to a drop in property values for everyone in those co-op or condominium buildings. The reasoning is that the tax might make these properties less appealing to potential buyers, thus reducing overall property values.

“The value of Manhattan House is significantly influenced by residential owners—families and individuals who depend on a stable real estate market,” the management noted in a letter to legislators on May 21. They highlighted that the building’s worth exceeds $1 billion, which includes contributions from long-term residents, retirees, and others who rely on this market.

Furthermore, the letter suggested that the tax’s implications could extend beyond just the wealthier second-home owners. It could disrupt existing condominium and cooperative owners by instigating issues like diminished market demand, uncertainty in property valuation, and increased administrative complexities.

The tax is set to be incorporated into a revenue package intended to support the state’s hefty $268.5 billion budget for the 2026-2027 fiscal year.

Mayor Mamdani made headlines recently when he publicly criticized billionaire Ken Griffin, CEO of Citadel, at a property he owns to promote the new tax.

Notably, Manhattan House has had its share of famous residents over the years, including Grace Kelly, Benny Goodman, and former Governor Hugh Carey.

According to Manhattan House, the proposed tax could:

• Reduce the real estate values for full-time residents.
• Hinder the ability for owners to sell, refinance, or maintain their homes.
• Threaten the stability of the real estate market in New York City.
• Affect retirees and long-term residents whose wealth may be tied up in their homes.

The management also argued that taxing the affluent would unduly burden buildings that are already facing steep tax, insurance, and other operational costs.

Furthermore, city leaders expressed concern that such a tax might undermine trust in New York City as a viable housing investment, fearing abrupt and poorly considered tax regulations.

Manhattan House’s representatives urged lawmakers to exclude this tax from the budget, suggesting it needs more public discussion and transparency.

In defense of the tax, Hochul’s office pointed out that residents living in apartments are not subject to the same taxes and stressed that the levy is directed solely at second homes exceeding the $5 million threshold.

Mamdani reaffirmed his support for the tax, emphasizing its aim to ensure that wealthy individuals like Griffin contribute fairly. He shared a cartoon depicting an empty apartment with a sign stating, “Miami is Home,” hinting at Griffin’s residence in Florida.

In reaction, the head of New York City’s main business organization advised Mamdani to refrain from vilifying business leaders like Griffin.

“I don’t believe anyone should be portrayed as the villain, especially in light of the violent incidents targeting CEOs,” stated Steve Fulop, president of the New York City Partnership, referencing previous tragedy in the business sector.