Billionaires targeted by the “luxury tax”: How the mayor of New York wants to collect 500 million dollars from the real estate empires of Jeff Bezos, Trump or Jay-Z
New York is proposing a tax on second homes over $5 million, estimating annual revenue of $500 million. The measure targets investors and non-residents, including big names in technology, finance and entertainment, according to Business Insider.
New York City Mayor Zohran Mamdani and Governor Kathy Hochul presented the bill for the new tax, called the “pied-à-terre tax.” This will apply to homes owned by people living abroad or in other states, in addition to current property taxes. The announcement was made Wednesday via a video filmed outside a luxury apartment on Central Park South.
Mamdani nominated Ken Griffin, the chief executive of the Citadel investment fund, which owns a penthouse in that building. “This pied-à-terre tax is designed specifically for the richest of the rich,” the mayor said.
The measure also targets other high-profile owners who have secondary residences in the city, such as Jeff Bezos, Donald Trump or the couple Jay-Z and Beyoncé.
The state has not yet provided details on how the home's value will be determined or the criteria by which a property will be declared a primary residence. It is also not clear how much the owners would pay, and the City Hall did not provide answers to these questions.
In New York, the assessed value of condominium apartments and co-ops, which make up the majority of housing in the city, is calculated by a complex formula. However, the authorities estimate that the tax included in the state budget would generate revenues of 500 million dollars per year.
Within 24 hours of the announcement, several business people attacked the proposal, claiming it could drive investment away from the city. Bill Ackman, founder and CEO of Pershing Square Capital Management, wrote on the X platform:
“Mamdani likes the slogan 'Tax the rich'. Unfortunately, his policies will harm the very electorate he is supposedly trying to help.”
The new tax would apply to 13,000 properties, according to estimates from Gov. Hochul's office. Identifying the people who own these apartments could be difficult, as many homes were purchased through trusts or limited liability companies.
Bezos and Trump, on the list of those affected
Jeff Bezos, the founder of Amazon and one of the richest people in the world, moved in 2023 to Miami, but kept his properties in New York. Between 2019 and 2021, he bought five apartments at 212 Fifth Avenue for over $100 million. He also previously owned four homes at 25 Central Park West with his ex-wife, MacKenzie Scott.
Rapper and music producer Jay-Z, along with his wife, artist Beyoncé, have lived in California for about a decade. There, they own a villa in the Bel-Air neighborhood and a property in Malibu.
However, the couple kept the apartment in the Tribeca area, where they got married in 2008. The value of this home has increased since Jay-Z purchased it, more than two decades ago, for the sum of 6.85 million dollars.
President Donald Trump owns a triplex in Trump Tower on Fifth Avenue. The apartment is approximately 1,022 square meters and was the subject of an investigation by New York authorities.
Although Trump currently lives in Washington DC and is domiciled in the state of Florida, he has retained his hometown properties. He publicly criticized the new tax on the Truth Social platform, saying the measure is “destroying New York.”
Other figures targeted by the new tax are Dell Technologies founder Michael Dell, real estate developer Stephen Ross, former Starbucks executive Howard Schultz, billionaire Michael Bloomberg and New York Mets owner Steve Cohen. All of them own luxury residences in Manhattan that exceed the value threshold set by the authorities.
