New York City Proposes Annual Tax on Second Homes Over $5 Million

Under a prior version of the proposal with a sliding scale reaching 4 percent on values above $25 million, Ken Griffin's Central Park South penthouse would incur about $9 million a year in surcharges.

The tax targets fixed assets like houses, condos, and co-ops that wealthy individuals often retain despite relocating. A billionaire acquaintance who moved from Manhattan to Miami during the pandemic kept his New York apartment, citing strong social, professional, and philanthropic ties to the city. He travels to New York frequently and has no plans to relinquish the property.

Academic studies of millionaire migration, spanning decades, show high-income households have lower migration rates than the middle class, as the wealthy remain embedded in their career networks and lives. One exception involves a modest flow of New Yorkers relocating to Florida late in life.

Digital technology and remote work during the pandemic have enabled billionaires to sever ties between business locations and personal residences, facilitating moves to low-tax areas.

Florida's lack of a real residency requirement allows the wealthy to declare a home as a homestead and limit days spent elsewhere to qualify as residents for tax purposes. 5 billion in Amazon stock in 2024.

Several billionaires have shifted to Florida while keeping companies in high-tax states. Bezos moved from Seattle to Indian Creek Island, but Amazon remains in Seattle. Larry Page purchased a compound in Coconut Grove for nearly $180 million, yet Google stays in the Bay Area.

Mark Zuckerberg acquired a $170 million waterfront mansion on Indian Creek Island, with Meta continuing operations in Silicon Valley. Howard Schultz bought a $44 million penthouse at the Four Seasons at the Surf Club north of Miami Beach, as Starbucks headquarters endure in Seattle. Ken Griffin relocated Citadel from Chicago to Miami after disputes with local officials over taxes and crime.

In response to the New York tax proposal, Gerald Beeson, Citadel’s chief operating officer, called the mayor's video outside Griffin’s apartment building shameful and indicated the firm might abandon its multibillion-dollar new Manhattan headquarters.

The proposed California Billionaire Tax, a onetime 5 percent levy on net worth above $1 billion, would have cost Larry Page roughly $14 billion if he had not left the state. Miami has emerged as a lifestyle tax haven with sunshine, nightlife, and yacht docking, drawing the ultra-wealthy.

U.S. county last year, exacerbated by President Trump’s immigration crackdown that reduced international inflows. Departing residents have average annual incomes half those of new arrivals, according to the Miami Herald.

The pied-à-terre tax applies to assets the rich are reluctant to sell, potentially stabilizing city revenues without eroding the tax base. People leaving Miami earn less than newcomers, altering the housing market by driving up prices and straining private-school availability. For the ultra-wealthy, reduced traffic and competition for resources in such cities can prove advantageous.

In other business news, Tiger Global Management led a funding round for PopUp Bagels in late March, valuing the chain at $300 million. Founded in 2020 by Adam Goldberg, PopUp Bagels started as a pandemic-era home kitchen experiment in Connecticut and gained popularity through social media with its 'grip, rip and dip' unsliced bagels paired with spreads.

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