Billionaire investor Bill Ackman is pushing back on New York City’s pied-à-terre tax, arguing the levy will backfire by shrinking property values and tax revenue rather than boosting city coffers.
Cap Rate Math Points to Steep Value Losses
In an X post on Saturday, the Pershing Square Capital Management CEO argued that a taxed home’s value will decline in proportion to the capitalized cost of the new levy.
Ackman noted the 5% surcharge on assessed property value equals roughly 0.3% to 0.75% of a home’s market value. Based on a 4% capitalization rate, he estimated that property values across the city, along with related tax revenue, could fall by 7.5% to 18.75%.
Ackman has been a vocal critic of the proposal from the beginning, warning that the policy could create unintended consequences for New York’s housing market and long-term tax base.
$500 Million Revenue Target
According to Gov. Kathy Hochul, the levy would hit roughly 13,000 properties, or 0.4% of city housing and could raise about $500 million annually.
The proposal has also faced privacy concerns over a city property database listing roughly 960,000 properties, though officials say only about 31,000 properties meet the valuation threshold for the tax.
Real estate taxes generated $39.6 billion in 2025, nearly half of the city’s local tax revenue, according to the Real Estate Board of New York report. The tax is projected to raise about $500 million annually, with the exemption-application deadline extended to Sep. 18.
The tax aims to close budget gaps, support essential public services, and ensure that wealthy non-resident owners of luxury second homes contribute their fair share to the city.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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