No Wealth Tax? Mamdani Floats a ‘Last Resort’

New York City’s new mayor is warning homeowners that a significant property tax increase could be on the table—though he says he hopes it never happens.

On Tuesday, Zohran Mamdani said the city might consider raising property tax rates by nearly 10% as a “last resort” if state leaders in Albany reject his proposal to increase income taxes on residents earning $1 million or more, according to the New York Times. The potential 9.5% hike—New York City’s first since the Michael Bloomberg administration—would affect more than 3 million homes and condos and over 100,000 commercial properties. Estimates from the Citizens Budget Commission suggest it could cost a typical homeowner about $700 annually.

Mamdani said the tax option, combined with drawing roughly $1.2 billion from city reserves, is the only measure fully under city control to help close a projected $5.4 billion gap over two years in his $127 billion budget plan. “If we do not go down the first path” of higher income taxes, “the city will be forced down a second, more harmful path,” he said at a Tuesday briefing, as reported by NBC New York.

New York Gov. Kathy Hochul, whom Mamdani has endorsed, downplayed the likelihood of a property tax increase and instead pointed to spending cuts and accounting adjustments, the Times reported.

Several city leaders—including Council Speaker Julie Menin and Queens Borough President Donovan Richards—criticized the idea as harmful to affordability, while landlord groups denounced it as a “war” on property owners. Mamdani’s supporters, meanwhile, have seized on the debate to renew their call to state lawmakers: tax the rich. Forbes has outlined both the anticipated and possible unforeseen impacts of a property tax hike in New York City, along with additional reactions.