A new tax on non-primary residences in New York City, touted as a way to target wealthy out-of-town property owners, may end up hurting middle-class homeowners. The tax, which can reach up to 5% of market value annually, is part of a broader plan by Mayor Zohran Mamdani that could destabilize the city’s housing market.

How the Tax Works

The tax applies to properties valued over $1 million, and owners must prove their primary residence to avoid the tax. However, the city’s initial rollout of the tax has been marred by bureaucratic hurdles, with many primary residents receiving notices to prove their exemption.

The tax could have far-reaching consequences, including a chill on the housing market, reduced demand from out-of-town buyers, and decreased property values. This could ultimately hurt local homeowners, who may see their equity diminished as a result.

Constitutional Concerns

Some argue that the tax is discriminatory, as it applies to a class of people without a rational basis related to municipal service usage. This could potentially violate the equal protection and commerce clauses of the Constitution.

Original reporting: Fox News (HLL/CB) — read the source article.