‘Check Your Mailbox’: NYC Begins Notifying Owners of Pied-à-Terre Tax on $5M+ Homes

Mayor Mamdani Puts Rich Absentee Homeowners on Notice

New York City has started formally notifying the owners of high-value second homes that a new annual tax is about to hit their property bills. In a post on X, Mayor Zohran Mamdani told those whose non-primary residences in the five boroughs are worth more than $5 million to keep an eye on their mailboxes. The Department of Finance, he said, dispatched letters alerting eligible property owners that the pied-à-terre tax—passed in May—will soon be due.

The tax is progressive: it starts at 0.8% of assessed value for properties in the $5 million to $25 million bracket and rises to 1.3% for homes valued at $25 million or more. City and state officials project it will apply to over 11,000 dwellings and generate roughly $500 million a year. The mayor framed the levy as a means to fund parks, libraries and schools, insisting that “the best city in the world” can only be sustained when everyone pays a fair share.

To help owners navigate the new obligation, the city has launched a dedicated webpage with a self-service eligibility tool and answers to frequently asked questions. The tax is designed to catch billionaire second-home owners such as Jeff Bezos, President Donald Trump, and Jay-Z and Beyoncé. In a pointed video earlier this year, Mamdani singled out Ken Griffin, CEO of Citadel, who bought a $238 million penthouse in 2019. Based on calculations by Business Insider, Griffin alone could face a pied-à-terre bill between $1.3 million and $1.4 million annually.

What the Pied-à-Terre Tax Means for Luxury Property and City Finances

Who Bears the Burden and How It Works

The pied-à-terre tax applies solely to residences that are not the owner’s primary home and that have a market value of at least $5 million. An absentee owner of a home just above the threshold, say valued at $5 million, would owe $40,000 a year (0.8%), while a $25 million property triggers $325,000. Because the rates are applied to the full value, even modestly above the $5 million mark the tax bill can be meaningful for owners who previously faced no equivalent local levy beyond standard property taxes.

Impact on the High-End Market

An extra five- or six-figure annual cost changes the calculus for anyone holding a pied-à-terre for occasional use. Luxury brokers and property analysts will be watching whether some owners decide to sell rather than absorb the recurring expense, potentially increasing inventory in Manhattan’s trophy-home segment. While the tax is unlikely to cause a wholesale price correction—ultra-wealthy owners may simply accept it as the cost of maintaining a New York base—it could soften demand at the margin, especially for properties just above the $5 million threshold where the tax represents a larger share of carrying costs.

A Revenue Win with Political Dividends

The estimated $500 million a year is a notable addition to the city budget, equivalent to funding for thousands of teachers or major park improvements. Politically, the mayor is leaning into a progressive argument that absentee luxury owners—many of whom benefit from New York’s culture and business infrastructure without being full-time residents—should contribute more to city services that less affluent year-round residents fund through income and sales taxes. The idea has broad public support in the city, even if it is fiercely opposed by luxury real estate interests.

The Griffin Effect

No figure crystallizes the intent of the tax better than Ken Griffin, whose Miami residency and $238 million penthouse have made him a poster child for the absentee-owner label. The projected $1.3–$1.4 million bill for his Central Park South home—and any additional units he owns—illustrates the scale of what the city stands to gain from just a handful of ultra-expensive non-primary residences. If other high-profile billionaires face similar bills, the city may enjoy a steady, politically palatable revenue stream that is harder to avoid than income-based taxes.

What Second-Home Owners Need to Do Now

Property owners who may be affected should take several concrete steps as soon as they receive the city’s notification:

• Open and read the letter from the NYC Department of Finance carefully—it contains official tax eligibility details and instructions.
• Visit the newly launched city webpage and use its online tool to verify whether your property meets the definition of a non-primary residence above the $5 million threshold and to check for possible exemptions.
• Calculate your expected annual tax by applying the relevant rate (0.8% or 1.3%) to the property’s assessed value, and factor this into ongoing ownership costs.
• Consult a tax advisor or property attorney to explore whether you might restructure ownership, transfer the property into a trust that qualifies for an exemption, or change the classification of the home as a primary residence if your circumstances support it.
• If the tax bill is substantial, reassess the financial case for retaining the pied-à-terre versus selling, especially if you use the home only occasionally.