Tax Hike for NYC’s Ken Griffin Due to New Policy

Ken Griffin, the founder of Citadel, is set to see his property tax bill in New York City skyrocket by seven figures, thanks to a new pied-à-terre tax introduced by Mayor Zoran Mamdani and Governor Kathy Hochul. This tax specifically impacts luxury vacation homes.

Griffin, who gained attention from a viral video shot outside his Manhattan penthouse in April, will owe an additional $1.3 million to $1.4 million in taxes next year due to this new measure, as reported by calculations from Business Insider.

Effective July 1, the tax focuses mainly on high-value second homes owned by individuals who do not reside in New York City.

Living primarily in Miami and boasting a net worth of around $48.3 billion, Griffin owns three properties in Manhattan, including a penthouse at 220 Central Park South and two units in a prestigious Upper East Side co-op on 740 Park Avenue.

The bulk of Griffin’s tax bill arises from the expansive mansion at 220 Central Park South, which he acquired in 2019 for approximately $238 million, marking the highest residential sale in U.S. history at that time. Before this new tax, his tax obligations on that property were about $836,526, per records from the city Finance Department.

Interestingly, city assessments placed the estimated market value of his penthouse last year at $15.55 million, which seems significantly lower than the purchase price he reportedly paid.

The two units at 740 Park Avenue were bought within the last 18 months for a total of $83 million, and together, they hold an assessed value of about $6.2 million.

The pied-à-terre tax targets second homes valued at over $1 million, with rates starting at 4% and climbing to 6.5% for properties assessed at $5 million or more.

This tax emerged from the national budget following Governor Hochul’s initial proposal, attracting support from Mayor Mamdani. Advocates, particularly from the Democratic Socialists, view it as a way to fulfill electoral promises aimed at taxing the wealthy.

However, the mayor’s focus on Griffin in his video announcement sparked backlash from business leaders. Griffin criticized the move, calling it “creepy,” and hinted that Citadel might steer future investments and jobs toward Florida instead of New York.

“This decision will lead to significant job creation in Miami over the next decade,” Griffin stated in a CNBC interview.

The hedge fund mogul also raised concerns about the future of Citadel’s planned $6 billion office tower at 350 Park Avenue.

While Griffin has become a prominent figure in this debate, he’s far from alone. Billionaires like Amazon founder Jeff Bezos and former Starbucks CEO Howard Schultz, who also have real estate investments in New York, could be affected by the tax.

The long-term impact of the tax is still unfolding. Anil Melwani, a CPA with offices in both New York and Florida, expressed concerns that the tax could deter the purchase of luxury second homes priced above $5 million, potentially communicating a negative message to prospective investors.

He thinks it’s a bad signal, noting, “Why would someone spend that much only to incur annual taxes?” Melwani, who relocated to Miami in 2022, also hinted at the risk of affluent residents moving to lower-tax states.

Nonetheless, he didn’t foresee a drastic negative economic impact on New York. “This is a niche issue, so I doubt it will hurt overall economic activity,” he mentioned, adding that wealthy visitors might opt for hotels or short-term rentals instead of buying second homes.

City officials claim the pied-à-terre tax could generate between $340 million and $500 million each year. But some, like real estate broker Victoria Steiner, suggest those projections may be overly optimistic, considering how buyer behavior could shift.

Steiner noted that similar taxes in the U.K. resulted in properties taking longer to sell and many sellers reducing their asking prices. He warned that if high-end home sales slow significantly, the city might also miss out on the tax revenue from property transfers.

“If transactions stall, the financial loss could outstrip what the city hopes to gain from new taxes,” Steiner cautioned.

The matter remains contentious, and both Griffin and Mayor Mamdani have yet to respond to requests for comment.