Mayor Zohran Mamdani is officially killing his property tax hike proposal for working New Yorkers, a City Hall source confirmed to Business Insider.
The mayor first pitched the policy in February and faced widespread pushback. It would have increased property taxes by 9.5%, in a hit to lower- and middle-income households. At the time, Mamdani called the plan “painful” and “a tool of last resort” to plug a budget gap of more than $5 billion.
Now, property owners in New York City can breathe a little easier, as Mamdani announced that Albany will step in to help bridge the budget hole instead.
The news comes as Gov. Kathy Hochul prepares to cement the state budget. Alongside the state legislature, Hochul secured an additional $4 billion in support, bringing the total new state assistance to nearly $8 billion over two years, per the Mayor’s Office. The move will help fund the mayor’s affordability agenda, they said. A source with knowledge of the situation said the governor was filling the gap to help avoid a property tax hike in the city.
“For years, the relationship between City Hall and Albany has been defined by dysfunction and infighting,” Mamdani said in a press release Tuesday. “Governor Hochul and I, however, share a belief that government works best when we work together on behalf of the people we serve.”
Mamdani is still pushing second-home hikes for the ultrawealthy
Mamdani’s initial property tax suggestion was met with significant pushback across the aisle. Critics said the plan would run counter to the mayor’s promise for a more affordable New York, and some hoped that higher taxes would instead be directed toward Wall Street and the ultra-wealthy.
The plan would likely have raised rents, worsening the city’s existing affordable housing crisis. Multi-unit buildings — where renters tend to live — are taxed at a higher effective rate than single-family or low-density homes, where more affluent New Yorkers tend to live. While renters don’t pay property taxes directly, higher property levies would likely trickle down from landlords to monthly rent payments.
Besides the property tax, Mamdani also floated an increase in income and corporate taxes, which would require support from Hochul and lawmakers in Albany. Hochul was lukewarm on the proposals. A local property tax hike, however, does not require state-level approval — meaning it was one budget lever Mamdani could pull if Albany did not step in.
The property tax proposal may be dead, but the mayor still seems poised to move forward with another hotly-debated housing levy: taxing multimillion-dollar second homes. The pied-á-terre proposal, a tax on non-residents’ homes worth at least $5 million, was announced by Hochul and Mamdani in April. The specifics of that plan — which Hochul and Mamdani say would raise $500 million, although the city comptroller estimates it could come in closer to $380 million — still haven’t been sketched out, and it’s not yet clear when it would take effect. It does, however, amount to an agreement between local and state governments to tax some ultra-wealthy homeowners.
“When I ran for mayor, I said I was going to tax the rich,” Mamdani said in an announcement video, filmed in front of billionaire Ken Griffin’s Central Park South apartment building. “Well, today we’re taxing the rich.”
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