Toby Howell

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New York is cooking up a new tax, but unless you're deciding between a Patek Philippe and a Richard Mill to wear to dinner, it's probably not going to affect you.

New York Governor Kathy Hochul unveiled a pee-to-tear tax this week which will go after second homes in New York City.

Specifically, it would target homes valued at over $5 million

whose owner's primary residence is outside of the city.

The proposal comes from the governor's office, but it has New York City Mayor Zoran Mamdani's fingerprints all over it.

Mamdani has been pushing to advance his Tax the Rich agenda he pledged to execute during his campaign, but has repeatedly run into opposition from Hochul, who doesn't want to use tax hikes to close the city's estimated $5 billion budget shortfall.

But Hochul's idea to target wealthy out-of-towners, raising an estimated $500 million in additional revenue in the process, was quickly endorsed by Mamdani, who jointly unveiled the plan.

Pita Terre is French for foot on the ground, but just think of it as a secondary residence you only live in for part of the year.

There's around 13,000 or so units in the city, which are over $5 million but aren't lived in full-time.

Mamdani singled out Ken Griffin, the billionaire hedge fund owner of Citadel, whose primary residence is Miami, but also owns a $240 million penthouse in Manhattan.

Neil, this policy is still just a proposal for now and has not yet been approved by the state legislature, but it's got its foot in the door and on the ground.

And this time, it does seem like the real estate industry is a little bit left out to dry.

The rest of the broader business community isn't rallying around the real estate industry because they're essentially just happy that the attention is directed away from them and directed on a specific industry like real estate.

The real estate industry's argument against this, though, is the same ones that they've used in the past.

like you mentioned in 2014 and 2019.

They think that it's going to artificially warp the market.

All you're going to do is see a lot of units come online that are priced just below $5 million, trying to undercut that new effort, that new tax.

They also say it's just going to dampen

demand in general from wealthy buyers.