economy
New York City Mayor Zohran Mamdani's pied-à-terre property tax is moving ahead. But will it work?
New York is moving ahead with a pied-à-terre property tax in its budget. Existing taxes from around the world's major cities show the limits of the policy.
TL;DR
- New York City is implementing a pied-à-terre tax on non-resident second homes worth $5 million or more.
- Similar taxes on second homes and vacant properties are in place in cities globally, including Vancouver, London, and Paris.
- The effectiveness of these taxes in improving housing affordability and generating substantial revenue is debated among experts.
- While some cities aim to return properties to the market, evidence suggests these taxes have limited effects on overall housing prices and rents.
- Revenue generated by these taxes is often modest compared to the overall city budget.
- The taxes are attractive politically as they target a narrow, affluent group without broad tax increases on full-time residents.
- Global trends suggest that while these taxes influence marginal decisions, they rarely determine major investment choices for the ultra-wealthy, though cumulative tax burdens can influence asset allocation.