Thomas Moran comments in eprivateclient on the proposed pied-à-terre tax in New York and how it compares to similar measures previously introduced in the prime property London market

New York City mayor, Zohran Mamdani, and Governor, Kathy Hochul, have proposed the state’s first pied‑à‑terre tax, targeting ultra‑wealthy property owners. The proposal would introduce an annual surcharge on one‑to three‑family homes, condominiums and co‑operatives valued at more than US$5 million, where the owner’s primary residence is located outside New York City.

The tax is expected to raise around US$500 million a year, drawing revenue from some of the city’s most high‑value properties, including Ken Griffith’s US$238 million penthouse and Alexander Varshavsky’s US$20.5 million residence.

How does this proposed tax compare to similar measures previously introduced in the London market?

In 2013, a new tax was imposed on residential property held in corporate structures, which were widely used by international buyers. This was followed in 2014 by changes to transaction taxes affecting properties valued above £1 million. Additional measures included a three per cent surcharge on second‑home purchases and a two per cent surcharge on non‑resident buyers. An annual ‘mansion tax’ on properties worth more than £2 million is now due to come into force in 2028.

Thomas Moran, Partner in our Private Property team, comments in eprivateclient:

Always framed as being taxes only levied on those who can already afford it, each tax [imposed in the UK] has individually caused double digit percentage falls in transaction numbers after its introduction. Cumulatively they have left the high-end London property market facing unnecessary headwinds and, importantly for political decision makers, its tax take for the UK Treasury is in significant decline as international buyers postpone buying or simply go elsewhere.

Read the full article in eprivateclient here.