Property Taxes in Focus: What NYC Buyers and Sellers Should Know

Recent headlines surrounding proposed tax changes in New York City have raised questions among buyers, sellers, and homeowners alike. With discussions tied to proposals from Zohran Mamdani gaining attention, many are wondering what these potential changes could mean for the real estate market.

A recent internal briefing at Brown Harris Stevens aimed to separate headlines from reality and provide a clearer understanding of what is being proposed and what is likely to happen next.

What Is Being Proposed?

One of the most widely discussed proposals is a 9.5% increase in New York City property taxes, intended to help close a projected budget gap. Property taxes already account for approximately 36–40% of the city’s total revenue, making them a critical funding source.

If implemented, the estimated impact would vary. The average homeowner could see an increase of about 700 dollars per year. Condo owners may see changes depending on assessed value. Renters could experience indirect increases if costs are passed through by landlords.

Additional proposals under discussion include higher transfer taxes on luxury properties, potential income tax adjustments for high earners, and other policy ideas that remain in early stages.

A Note on the Pied-à-Terre Tax

Another proposal receiving increased attention is a potential pied-à-terre tax, which would apply to certain high-value secondary residences in New York City. Unlike some of the other proposals, this measure is being discussed more seriously as a way to generate revenue to help address the city’s budget deficit.

If implemented, the tax would primarily impact non-primary residences at higher price points, and could become a more meaningful consideration for luxury buyers and investors evaluating long-term ownership costs in New York City.

How Likely Are These Changes?

At this stage, most proposals remain far from becoming law.

Many would require approval from multiple governing bodies, including the New York City Council, the New York State Legislature, and the Governor. City Council leadership has already expressed opposition to the proposed property tax increase, which significantly lowers the likelihood of passage.

Insights shared during the briefing suggest that these proposals are often part of broader budget negotiations rather than finalized policy. As a result, the probability of them passing in their current form is considered low.

What Could This Mean for Buyers and Sellers?

For many buyers, particularly at higher price points, a modest increase in property taxes is unlikely to significantly influence purchasing decisions. In many cases, the added annual cost represents a relatively small portion of overall ownership expenses.

The impact may feel more noticeable for middle income homeowners. Renters may also experience indirect effects, as landlords adjust to rising operating costs.

One area of concern is the potential effect on small multifamily property owners. Many operate with limited margins and rely on rental income to cover expenses. If taxes rise while other costs remain high, some owners could face financial pressure, which may influence rental supply over time.

What to Keep in Mind

For buyers and sellers navigating today’s market, the most important takeaway is perspective. These proposals are early stage discussions, not enacted policy, and many face significant political hurdles before becoming reality.

Staying informed is important, but so is understanding the difference between headlines and likely outcomes. The New York City real estate market continues to show stability, with buyers focused on opportunity and long term value.

As conversations around tax policy evolve, maintaining a clear and informed view will be key to making confident real estate decisions.

We also extend our thanks to the panelists who contributed their insights to this discussion: Pierre Debbas, Founding Partner, Romer Debbas LLP; Greg Heym, Chief Economist, Brown Harris Stevens; Moderator: Itzy Garay, Co-President, Brown Harris Stevens.