The wealthiest part-time New Yorkers just got an expensive housewarming gift. State lawmakers passed a new tax on NYC second homes that Mayor Zohran Mamdani has been pushing for months, and Citadel CEO Ken Griffin is already in line to pay more than $5 million a year on his Manhattan apartments.
The new tax hits non-primary homes in NYC valued at $1 million or more, based on the city's Department of Finance numbers, which means Mayor Mamdani gets $500 million in fresh revenue to help close the city's budget gap.
It rolls out in two phases. For tax years 2026-2027 and 2027-2028, second homes between $1 million and $3 million pay 4%, with properties from $3 million to $5 million paying 5.25% and anything above $5 million paying 6.5%.
That sounds huge until you find out what the city thinks these places are worth. Robert Pollack, a property tax attorney with Marcus and Pollack LLP, told CNBC the city's old valuation system often pegs apartments at 10% or less of true market value, so the first two years are mostly bark with very little bite.
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Mamdani made Griffin the face of this fight by filming a video in front of Griffin's 220 Central Park South penthouse to announce the tax. The Florida tax resident fired back by saying he'd shift more jobs to Miami.
The numbers explain the pushback. Griffin paid $238 million for his 24,000-square-foot penthouse in 2019, but the city values it at $15.5 million, leaving his current property tax bill on the unit at $858,332.
Under the first phase of the new tax, that bill more than doubles to $1.87 million per Pollack's math. Starting in 2028-2029, when the city switches to comparable sales for valuations, it climbs to almost $4 million.
Add Griffin's two apartments at 740 Park Avenue (he paid $83 million for them), and his total Manhattan property tax bill clears $5 million.
Starting in 2028-2029, the city updates its valuations to reflect what these apartments actually sell for, with rates dropping to make room: 0.8% for $5M to $15M homes, 1.05% for $15M to $25M, and 1.3% for anything above $25M.
Lower rates, much bigger numbers. For someone like Griffin, that's the difference between a one-time sticker shock and a multi-million dollar annual bill that compounds every year.
"It's incredibly complicated," Pollack said.
The bigger question is whether NYC can keep its top earners parked here long enough to collect, since Griffin already runs his hedge fund out of Florida, and brokers told CNBC their wealthy clients feel they already pay too much. For context, Michigan just passed an 8-bill package that could cut property taxes by $1,400 a year, which is a very different pitch to high earners.
"All my clients already feel like they pay too much," Pollack said. "These numbers are significant. I don't care how wealthy you are."
The city wanted $500 million. It might find out the hard way how mobile the very rich actually are.
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