Apr 21, 2026
A cornerstone of New York City Mayor Zohran Mamdani's platform (1) that resonated especially well with young constituents and newcomers (2) was his vow to make life in the metropolis more affordable, in part by taxing the rich — a promise he's now carrying out with a controversial pied-à-terre levy, the first in New York state history.
Formally proposed on April 15 (3), the tax targets the owners of properties worth $5-million and up who do not use said properties as their primary residence, a group Mamdani and NY Gov. Kathy Hochul generalize as "out-of-city residents and global elites who use New York City real estate as a vehicle for wealth storage rather than as homes." They estimate (4) that the measure could garner a hefty $500 million per year for the city.
Advertisement
A video announcing the move, made in the characteristic social media-savvy style that earned the mayor so many votes (5), has garnered significant buzz and support, amassing 33.6 million views and 3.1 million likes — the most of any of his posts, it appears — at the time of writing (6).
But, there have also been some criticisms of the leader's efforts to make the wealthy "pay their fair share," which some, including Shark Tank star Kevin O'Leary, feel are misguided (7).
‘How stupid a tax is this?’
O'Leary took to his own social accounts to disparage the new fee as the "stupidest" he's seen.
"This might be the best commercial for Miami Beach real estate I've ever seen and New York paid for it," he wrote on X (8) alongside a clip from a CNN interview (9) in which he further explained the glaring contradiction he sees in the policy.
"You've got someone who spends $5 million or more [on an NYC home], does not really use the place, but still pays maintenance — so, supports employees in the building — and property tax, but doesn't put any burden on city services whatsoever. How stupid a tax is this?" he asked.
He argued that a mayor should, in fact, want more people holding secondary properties and contributing to the tax base in this way without using their "fair share," to use Mamdani's words, of city services like public transportation, waste disposal, libraries, schools and more.
Along with rarely being in the city to use these resources, by virtue of their wealth, these households also ostensibly aren't using city-funded social safety nets like housing subsidies, though they are contributing to funding them (10).
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Won't the ultra-wealthy just leave?
Rich New Yorkers have been fleeing to states with lower tax rates for years, but fears about a pronounced exodus following the inauguration of the 112th mayor, dubbed by some as "the Mamdani effect" (11), has yet to come to fruition, according to some data (12).
Advertisement
Yet, in March, Hochul admitted the state's tax base has been eroded by the recent departure of high earners, and urged wealthy individuals who do support higher taxes for their peers, such as members of the Patriotic Millionaires (13) organization, to "go down to Palm Beach and see who you can bring home."
"I need people who are high-net worth to support the generous social programs that we want to have in our state," she said to Politico's Nick Reisman during a fireside Q&A (14).
This, and the fact that the top 1% provides more than 40% (15) of the state's total personal income tax revenue (16), seems somewhat at odds with her more recent statements (17) that people who own pied-à-terres "are not contributing in the same way that the 8.3 million New York residents do."
But, given NYC's budget shortfall, the governor has called the proposed levy a "common-sense" (18) surcharge toward stabilizing the city's finances, with alternatives like raising income taxes on residents and corporations serving as "nonstarters" that she believes would cause more harm than good.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
The New York Times (1); ABC News (2); NYC.gov (3),(4); BBC (5); Instagram (6); The Free Press (7); X (8); CNN (9); The Atlantic (10),(15); The Guardian (11); USA Today (12); Patriotic Millionaires (13); YouTube (14),(17),(18); Visual Capitalist (16)
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Becky Robertson is a senior staff reporter with Moneywise and a lifelong writer. Along with years in the journalism industry at outlets such as blogTO and Quill & Quire, she's participated in writing residencies at the Banff Centre for Arts & Creativity and Writing Workshops Paris. With 33 countries visited and counting, she finds travel to be one of her greatest inspirations.
