Mamdani’s budget plan counts on taxing pricey second homes

Most New Yorkers will not have to worry about seeing their property tax rates go up soon. But for a small number of those who own luxury second homes in the city, the prospect is still alive. 

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Mayor Zohran Mamdani on Tuesday ditched an earlier proposal to broadly raise property taxes by nearly 10%. Instead, his executive budget aims to close New York’s deficit with savings and more aid from Albany. 

“We have balanced the budget, and we have done so without placing the burden on the backs of working New Yorkers,” Mamdani said at a news conference at City Hall. “This budget does not raise property taxes and it refuses to slash services.”

The state aid includes an estimated $500 million from a new surcharge on expensive pieds-à-terre that was pitched by Governor Kathy Hochul. 

The details of how that new levy could be implemented are still being debated as part of state budget negotiations and haven’t yet been settled, Bloomberg News previously reported.

Mamdani has said the second-home tax was an important step in his pledge to raise taxes on the wealthy. He has referenced several sprawling units in the city that he says are used only part-time by their owners, including a $238 million penthouse bought by billionaire Ken Griffin, a $90 million apartment purchased by a Saudi prince and a $30 million home bought in cash by a Russian auto dealer.

Mamdani said City Hall is working with staffers in Albany on how to implement the pied-à-terre charge to raise the needed cash.

“These are still active discussions that we’re having,” Mamdani said. “We will have a final product soon that does generate the $500 million per year.”

The mayor’s $124.7 billion executive budget is the latest version of his spending plan for the fiscal year that begins July 1. The topline spending number is higher than last year’s adopted budget and some observers said the city has more work to do to curtail its outlays. 

“The City deserves credit for starting to rein in spending, but its sights pale in comparison to the opportunity and need,” said Andrew Rein, president of the Citizens Budget Commission, a nonpartisan budget watchdog.