In April, to mark Tax Day in the United States, New York Mayor Zohran Mamdani filmed himself on Billionaires’ Row, a cluster of ultra-tall apartment buildings just south of Central Park. He promised to tax the rich, and standing outside hedge fund billionaire Ken Griffin’s $238 million penthouse, he declared, “Today, we’re taxing the rich,” with a flamboyant smile. The video, titled Happy Tax Day, New York, was a bold piece of political theatre.
According to New York City Comptroller Mark Levine, the pied-à-terre tax on second homes will generate approximately $500 million annually from around 11,200 properties. The policy targets ultra-wealthy non-residents who own luxury apartments they rarely use, often called “ghost towers” because lights remain off most of the year.
Parallels with UK Housing Policy
Across the Atlantic, UK Prime Minister Keir Starmer and Chancellor Rachel Reeves have quietly pursued similar measures. Last year’s budget introduced a new tax on second homes and a “mansion tax” targeting super-prime areas in London and other cities. These policies aim to address housing unaffordability driven by the financialization of real estate and inflationary monetary policies since the 2008 financial crisis.
However, unlike Mamdani, Starmer has been reticent about framing these taxes as a moral stance against wealth inequality. The New York mayor’s approach is adversarial, demonizing the rich to fund essential services. New York Governor Kathy Hochul, a centrist Democrat, supports the tax, stating, “If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker.”
Impact and Backlash
Mamdani faced backlash from billionaires like Ken Griffin, who called the video “creepy and weird” and threatened to move his business to Miami. However, data from the Fiscal Policy Institute shows that the top 1% of earners are the least likely to leave New York City. The institute found that “states with more progressive tax systems tend to have higher concentrations of millionaires.” The real exodus is among working- and middle-class families who can no longer afford to live in the city.
In the UK, similar arguments arose over the abolition of non-dom status. HMRC data shows no evidence of increased departures by non-doms. Despite this, Starmer has not been vocal in advocating for wealth taxes, possibly fearing antagonizing the rich.
A Broader Debate on Wealth
The pied-à-terre tax is a step toward addressing the housing crisis, but experts argue that deeper issues remain, including the financialization of real estate. Anna Minton, reader in architecture at the University of East London, notes that high-net-worth individuals have outsized political power, overconsume at the planet’s expense, and fragment society. She argues that such taxes should be just the beginning of a broader conversation about wealth and fairness.
The New York tax takes effect on July 1. Its most important outcome may be shifting the parameters of the debate on wealth, encouraging other cities to follow suit.
