New York Mayor Zohar Mamedani is promoting a new legislative initiative to impose an annual tax on owners of luxury properties - who do not live in them.
According to the plan, owners of properties valued at more than $5 million who are not registered as New York residents and who use the property as their primary residence will be required to pay an additional annual levy.
The tax is expected to generate about $500 million a year for the city's coffers, which will be directed to financing public infrastructure and municipal services.
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Supporters of the tax claim that it is a measure of distributive justice.
According to them, the city suffers from a severe housing shortage and underfunded public services, while thousands of luxury apartments stand empty most of the year and serve as "real estate safes" for foreign billionaires.
On the other hand, the New York Real Estate Association and property owners' groups warn of serious economic consequences. Opponents claim that the tax will scare away international investors, lower the value of properties in the luxury market, and harm an entire chain of businesses that rely on the construction and tourism industries. In addition, it is claimed that this is a tax that is complex to enforce and will encourage manipulation of residency records.
The main argument is: property owners already pay the highest property taxes in the country, and that the new tax is an unfair double tax.
Property owners also fear a sharp decline in demand for apartments valued at $5 million or more, which would lower the value of entire buildings and reduce the city's revenue from other taxes.
