Critics Warn Hochul’s New Tax Could Impact Retirees and Property Values

Critics argue that Governor Kathy Hochul’s proposed pied-à-terre tax on luxury second homes in New York could adversely affect not only the wealthy but also families and retirees residing in the same buildings.

Recently, managers at the prestigious Manhattan House Condominium, located at 200 E. 66th St., sent a letter expressing their concerns to state Senator Liz Krueger and other politicians. The proposal, which has the support of Democratic Socialist Mayor Zohran Mamdani, is under scrutiny.

The building’s management cautioned that the surtax targeting second homes valued over $5 million might decrease property values for all residents in the same co-op and condo buildings, potentially deterring future buyers.

Opponents of the tax claim that this could lead to a general decline in property values.

“Manhattan House represents over $1 billion in residential property value, according to publicly available data. This value is not solely in the hands of absentee investors or speculative buyers. It belongs to local residents, families, retirees, and long-time New Yorkers who depend on the stability and liquidity of the city’s condominium market,” the letter from Manhattan House stated, dated May 21.

The letter further contended that the proposed tax might affect more than just high-value second homes. It could impact current condominium and co-op owners by introducing challenges such as reduced market demand, valuation uncertainties, increased transaction complexities, and additional 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.

Manhattan House’s famous residents over the years have included film star and Princess of Monaco Grace Kelly, jazz legend Benny Goodman, former New York Gov. Hugh Carey and comic actress Imogene Coca.

Manhattan House said the planned pied-à-terre tax could:

• Lower the value of apartments owned by many full-time New York residents.

• Make it harder for owners to sell, refinance, or retain their homes.
• Impact the liquidity and stability of the New York City condominium and co-op market.

• Affect retirees and long-time residents whose net worth may be concentrated in their homes.

Manhattan House also said the tax on the rich would impact buildings that already bear “significant tax, insurance, regulatory, labor, maintenance, and compliance costs.”

The tax could also shatter “confidence in New York City as a place where residents can invest in a home without later being subjected to rushed and poorly understood tax policy,” its management said.

Manhattan House argued that the tax should be removed from the budget and subjected to a rigorous public review and hearings.

Hochul’s office Sunday defended the levy, arguing that New Yorkers who live in their apartments will not be taxed and that the surcharge will only apply to second homes worth more than $5 million.

Mamdani, in an another apparent swipe at Citadel’s Griffin, also doubled down on championing the surtax on second homes.

“Our new pied-à-terre tax will have the ultra-wealthy elite — those who own $5 million apartments in New York City but don’t actually live here — pay their fair share,” he said on X.

His post included a cartoon sketch with one panel showing an empty apartment with a sign on the wall saying, “Miami is Home.”

Griffin lives in the Miami area, indicating Mamdani might be reviving his feud with billionaire hedge fund honcho.

The head of the city’s leading business group Sunday said Mamdani should stop demonizing business executives such as Griffin.

“I don’t think you should turn anybody into a villain — especially in the world where you have CEO’s that were assassinated, like in the UnitedHealthcare situation,’’ said Steve Fulop, president and CEO of the Partnership for the City of New York, on 77 WABC’s the “Cats Roundtable” program, referring to the assassination of the exec allegedly by Luigi Mangione.

“You had a shooting at Blackstone last year. I don’t think you should ever single anybody out. … That was bad.”