Apr 18, 2026
On April 15, New York City Mayor Zohran Mamdani announced plans for a new wealth tax targeting people who own expensive real estate in the city without actually living there (1).
The tax is very specific, only impacting real estate valued at $5 million or more, and Mamdani expects it to generate $500 million in revenue each year. Some billionaires, however, aren't happy about it.
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Mamdani mentions Ken Griffin, CEO of the hedge fund Citadel LLC, by name in the announcement video. For much of the video, Mamdani stands outside Griffin's $238 million penthouse, which the mayor says largely sits unused.
In an April 16 post on X, fellow hedge fund manager Bill Ackman came to Griffin's defense, saying "we should be applauding Ken."
Here's why Ackman disagrees with Mamdani's tax, and why New York Governor Kathy Hochul is joining the mayor in his effort.
Why is New York City implementing a pied-à-terre tax?
This new wealth tax is a pied-à-terre tax, or a tax on secondary residences (2). It won't apply to primary residences, nor will it apply to secondary residences that are being used as rental properties, according to Governor Hochul (3). If someone is using the residence, no matter who it is, the tax doesn't apply.
This would be the first time a pied-à-terre tax is implemented in New York City, but it isn't the first time one was proposed. A similar tax was put forth in 2019, but it ultimately failed to pass (4).
Hochul calls the tax a "common-sense surcharge" and says it will help shore up the budget gap that New York City is currently facing (5).
The governor compares it directly to other budget proposals that she doesn't support, such as raising income taxes on residents or taxes on corporations. She says these taxes could drive people or corporations out of the city, which she wants to avoid. This is likely in reference to Mamdani's campaign promise to push for an increase on corporate taxes, as well as taxes on New Yorkers making more than $1 million annually (6).
She says that people who own these secondary residences are benefitting from New York City's strengths through rising property values, but they aren't contributing back in turn. The buildings are "part of our skyline, but those people are not part of our city," she says.
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"It's a matter of fairness to all those millions of residents who actually live here."
Many of the tax's details aren't hammered down just yet, but it will likely be a yearly fee based on the value of the residence (7).
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Ackman says non-residents 'drive NYC's economy'
As he explained on X, Ackman believes high-spending non-residents are an important part of New York City's economy because their expensive penthouses help fund condominium development (8). Without them, he says, high-end development won't be viable.
In turn, Ackman says high-end development leads to a number of profitable jobs in NYC, including construction, legal, brokerage and marketing roles. "I can't imagine the NYC construction unions are excited about his [Mamdani's] plan," he says.
According to Ackman, non-resident apartment owners don't put a strain on New York City's resources, such as schools. But he also says they "drive growth in retail sales, restaurants, theater, and other important drivers of our economy." Ackman, however, doesn't clarify exactly how non-residents drive those aspects of the economy without residing in the city.
He says that non-resident owners "already pay a lot of taxes including mansion taxes, real estate taxes, sales taxes and more." Ackman also worries that this tax will cause Griffin to move his business out of New York. While Citadel LLC is headquartered in Miami, most of its employees are still in New York City — over 1,800 of its approximately 2,400 workers (9).
Griffin has been critical of Mamdani's talking points in the past, but he hasn't yet responded to the tax proposal or Mamdani's video (10).
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
X (1),(8); USA Today (2); Office of the Governor of New York (3); New York City Independent Budget Office (4); YouTube (5); Zohran for NYC (6); The New York Times (7); Citadel (9); Bloomberg (10).
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Kit Pulliam is a DC-based financial journalist with over five years of experience writing, editing, and fact-checking financial content. They've covered a wide variety of financial topics, including banking, taxes, budgeting, investing, politics, the economy, and government policy.
