Despite fierce warnings from industry leaders that a proposed tax on part-time residents could trigger a massive flight of wealth from New York City, the ultra-luxury housing market in Manhattan is experiencing a major surge in activity.
According to a recent report by CNBC, high-end real estate transactions have actually outpaced last year’s figures, even as a bitter political battle escalates over a new annual levy targeting multi-million-dollar secondary residences.
Data compiled by Olshan Realty reveals that between mid-April and early May, buyers inked 133 contracts for Manhattan properties priced at $4 million or above – a slight increase from the 130 contracts signed during the identical window last year. More telling, however, is the sheer financial volume: the total dollar value of these transactions jumped 10% to top $1.12 billion.
The momentum is particularly fierce at the absolute peak of the market. CNBC noted that contracts for estates priced at $10 million or more skyrocketed by a staggering 80%, locking in 34 deals over the four-week stretch.
“The last four weeks demonstrates that an impending pied-à-terre tax has had no effect on the luxury market in Manhattan,” Donna Olshan, president of Olshan Realty, told CNBC.
The resilient numbers stand in stark contrast to the dire predictions coming from the real estate sector. The controversy centers around a legislative push backed by New York Governor Kathy Hochul and New York City Mayor Zohran Mamdani. Introduced in mid-April, the proposed legislation would impose an annual tax on non-primary residences valued at $5 million or higher. Mayor Mamdani projects the initiative could generate $500 million annually, arguing it ensures affluent part-time residents contribute appropriately to the city’s economic ecosystem.
Conversely, real estate executives argue the policy will backfire, suppressing property values and draining the local economy of high-spending consumers who already contribute to property taxes without straining public services like public schools.
Some brokerages claim the looming legislation is already causing friction behind the scenes. Pamela Liebman, President and CEO of the Corcoran Group, told The Real Deal that numerous high-profile deals – specifically those hovering in the $30 million to $40 million range – have been placed on temporary hold as buyers adopt a watchful stance.
The political debate has also taken on an unusually personal tone. The friction intensified after Mayor Mamdani utilized the backdrop of a ultra-luxury building belonging to billionaire Citadel CEO Ken Griffin to promote the tax proposal on social media.
Griffin, who established his primary residence in Miami after purchasing a record-shattering $238 million Manhattan apartment in 2019, fired back at the political maneuvering. Speaking to CNBC, Griffin characterized the mayor’s video as being “in poor taste” and explicitly tied it to his future corporate strategy. He stated that Citadel would actively shift job growth to its Miami headquarters over the coming decade “as an immediate and direct consequence of the mayor’s poor decision here.”
In response, a spokesperson for the mayor’s office defended the vision, telling CNBC that while the administration supports the success of all residents, the current tax framework is fundamentally flawed by favoring extreme wealth at the expense of working-class citizens.
Beyond the political theater, significant logistical hurdles remain regarding how the tax would be enforced. New York City’s existing property assessment framework notoriously undervalues real estate relative to actual market prices. As CNBC previously reported, Griffin’s landmark $238 million purchase is officially assessed by the city at just under $7 million, highlighting a systemic valuation gap that lawmakers will have to reconcile if the pied-à-terre tax is ultimately passed into law.
About Columbus International Real Estate Headquartered at Rockefeller Center in New York with strategic offices in Miami, Milan, and Florence, Columbus International is a premier brokerage and market observatory bridging luxury developers with global buyers. Specializing in the vibrant Italy-U.S. corridor, we seamlessly guide Italian capital into the American market while connecting U.S. buyers with exceptional real estate opportunities across Italy. Inquiries: info@columbusintl.com
