Questions persist after Gov. Hochul proposes tax on second homes in NYC worth more than $5M
MIDTOWN, Manhattan (WABC) -- Gov. Kathy Hochul's proposed taxes for people with second homes in New York City worth $5 million or more, is raising questions over how much will ultimately be collected due to the way the city assesses the value of those uber expensive properties.
The owners of New York's ultra-luxury apartments pay relatively little in real estate taxes. High-rise condos purchased for tens of millions are routinely assessed for a tiny fraction of their market value, which could complicate Gov. Kathy Hochul's hopes to tax the homes of non-residents, worth more than $5 million. It's a plan she announced last week.
"We're talking about people who are ultra-wealthy," Hochul said.
But under the city's current assessment formula, even President Donald Trump's apartment in Trump Tower would avoid the tax because it's assessed at just $2.7 million.
Experts say the market value is irrelevant.
"State law requires the Department of Finance, for tax assessment purposes, to value co-ops and condos as if they were rentals," said Ben Williams of Rosenberg & Estis.
In a video last week, Mayor Zohran Mamdani praised the governor's plan.
"This pied-à-terre tax is specifically designed for the richest of the rich," Mamdani said in the video.
On Wednesday, he admitted it's a work in progress.
"Part of the conversation around the administering of it is also to tackle the longstanding chasm between stated values and assessed values," he said.
The questions were first raised by the online news outlet, The City.
On Wednesday, Gov. Hochul called out Trump and his New York City apartment.
"Trump claims this apartment is worth $200 million. Rest assured, these are exactly the kinds of properties that will be taxed," Hochul said.
Steve Fulop leads the city's most influential business group, Partnership for New York City.
"It's going to raise relatively little dollars, and they, themselves, say that most assessments won't qualify for it," Fulop said. "So, if that's the end outcome, then why do it?"
The tax is supposed to raise $500 million in annual revenue, but that won't happen unless state lawmakers come up with a new way to measure the value of New York's ultra-luxury real estate.
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