New York City’s introduction of a pied-à-terre tax has provided fodder for Zohran Mamdani’s critics, who accuse the democratic socialist mayor of attacking the rich – even as others welcome it as a much-needed effort to tax the wealthy in a city known for its yawning inequality and cost-of-living crisis.
The tax, aimed at closing the city’s budget gap, covers people who own but do not live full-time in a house worth more than $5m or a condominium or cooperative unit worth at least $1m.
The city recently sent letters to 17,000 addresses suspected to be second homes and published a tax roll of about 960,000 owners who could be subject to the surcharge. The list, which the city stated was intended to help people find out if they could be liable, also contained the properties’ addresses and market values.
Some New Yorkers were upset that they received notice of their potential tax liability even though the particular property is their primary residence. Others saw the list as an invasion of privacy and as Mamdani again trying to shame the ultra-rich…
“In the context of the city doing everything it can to get housing construction happening, the idea that we would be having empty units is hard to justify,” said James DeFilippis, a professor of planning and public policy at Rutgers University. “If you have something that is creating a negative externality that is imposing costs on others, the most efficient way to deal with that, just in narrow economic terms, is to impose a tax.”
The city did not actually violate anyone’s privacy because the information in the database was already publicly available, DeFilippis said. The local government regularly releases it as part of its property tax assessment role.