Exclusive | Hochul's pied-a-terre tax will hurt regular folks, retirees because of property-value fallout: critics

A proposed surtax would apply to second homes worth more than $5 million in New York City. Critics argue the tax would not only target absentee owners but also affect residents, families, retirees, and long-time New Yorkers living in the same co-op or condo buildings. Building managers warn the tax could make properties less attractive to future buyers, lowering property values for everyone in the building. They also warn of reduced market demand, valuation uncertainty, higher transaction friction, and administrative burdens. The tax is expected to be included in a state revenue bill to fund the 2026–2027 budget. Supporters have publicly promoted the plan during protests tied to high-profile properties.

"Managers at the landmark luxury Manhattan House Condominium at 200 E. 66th St. recently fired off a letter to state Sen. Liz Krueger and other pols griping about the plan - which Democratic Socialist Mayor Zohran Mamdani wholeheartedly backs. The building overseers warned that the planned surtax on second homes worth more than $5 million in the city could impact the property values of every owner who lives in the same co-op and condo building because it makes the sites unattractive for future buyers. That decreases everyone's property values, the opponents said."

"“Based on publicly available market data, Manhattan House represents well over $1 billion in residential property value. That value is not held only by absentee investors or speculative buyers. It is held by residents, families, retirees, long-time New Yorkers, and owners who rely on the stability and liquidity of the New York City condominium market,” Manhattan House said in a May 21 letter to the lawmakers."

"The letter argued that the tax's impact could extend beyond “high-value second homes” and affect existing condominium and co-op owners whose homes could be affected by “reduced market demand, valuation uncertainty, higher transaction friction, and administrative burdens.”"

"The new tax is expected to be included in the revenue bill to fund the state's mammoth $268.5 billion for 2026-2027. Mamdani personally set off a firestorm over the issue when he stood outside of a residential property owned by billionaire Citadel CEO Ken Griffin to tout the new planned tax."

Read at New York Post