We did the math on Ken Griffin's pied-à-terre tax bill
· Business Insider
Fabrice COFFRINI / AFP via Getty Images; Lev Radin/Pacific Press/LightRocket via Getty Images
- New York City's pied-à-terre tax has officially passed.
- The new levy is set to impact several well known billionaires, including Ken Griffin.
- Here's how much the Citadel CEO, who has found himself in Mayor Zohran Mamdani's crosshairs, will owe.
New York officials rolled out the details of the city's new pied-à-terre tax this week, so we took out our calculators and got busy.
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The tax will impact an estimated 10,000 properties in New York City, including those of Ken Griffin, who has found himself at the center of the discourse about the levy.
When Mayor Zohran Mamdani announced the tax in April, he called out Griffin by name.
The Citadel CEO, who lives full-time in Miami, owns three apartments in New York City: a penthouse on Central Park South that broke records when he bought it for $240 million in 2019 and two units in the upscale Upper East Side coop 740 Park Avenue, which he spent a total of $83 million on over the past year and a half.
The units will cost Griffin, who is estimated to be worth $48.3 billion, an extra $1.3 million to $1.4 million next year, based on the details of the tax outlined in the State's budget, public real estate records, and building documents.
The hedge fund titan did not respond to a request for comment from Business Insider.
Griffin's Central Park South unit would make up the bulk of his tax bill, given its market value of $15.55 million last year. The Park Avenue units, which are part of a co-op building, have a combined market value of around $6.2 million, based on his ownership stake in the building's shares.
The New York City Department of Finance has a history of significantly underestimating apartment values.
"The assessed value has very little connection to actual market value," Jonathan Miller, the director of markets for StreetMatrix and an expert appraiser, said. The value assessed for a $5 million property, he said, is "hardly ever 5 million."
The new tax code hopes to address this over the next two years, at which point the calculus for Griffin's bill is set to change.
For now, the law addresses the assessed-value disparity for condos and co-ops by levying a maximum 6.5% rate on that value; single-family homes are subject to rates of 0.8%, 1.05%, and 1.3%, depending on the home's value. The idea is that, over the next two years, the city will create its own assessment mechanism to more accurately capture market value. Once the new value is on the books, all pieds-a-terre will be taxed at the rates ranging from 0.8% to 1.3%.
Griffin is one of several well-known billionaires who will owe money under the new tax law, which takes effect on July 1.
Former Starbucks CEO Howard Schultz, who moved from Washington state to Miami this year, owns a West Village penthouse, and President Donald Trump, who lives in D.C. and votes in Florida, owns property in his hometown of New York, including his Fifth Avenue triplex in the Trump Tower.
While Griffin has come out against the tax and the mayor — "Mamdani has made it very clear, New York does not welcome success," he said in May — Amazon cofounder Jeff Bezos was more open to the idea.
"I think the pied-a-terre tax is a fine thing for New York to do," Bezos told CNBC earlier this month.
It's a good thing, too. Bezos, a Miami resident, owns at least five apartments inside 212 Fifth Avenue that he purchased for a total of more than $100 million, so he should be getting his checkbook ready.
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