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Citadel is increasing its focus on Miami operations while concerns grow over a proposed tax in New York City targeting high-value second homes. CEO Ken Griffin criticised the move and raised concerns about its impact on business sentiment. Other industry leaders also warned that such taxation could influence job creation and investment decisions. Meanwhile, policymakers are working on valuation methods to implement the tax, which is expected to affect thousands of properties. Experts remain divided on its effectiveness due to gaps between assessed and market property values.
Citadel is strengthening its presence in Miami as discussions continue in New York City around a proposed tax on high-value second homes. CEO Ken Griffin recently said the firm is doubling down on its Miami investments, while also reviewing its plans for a major office redevelopment project in Midtown Manhattan, which remains under internal discussion. Advertisement
The proposed tax targets second homes, including condos and co-ops valued above USD 5 million, if they are not declared as primary residences. The idea has sparked debate about whether such measures could lead to wealthy individuals shifting their base away from New York.
The issue gained attention after New York City Mayor Zohran Mamdani released a video in the past month, stating that the city is taxing the rich. The video was filmed outside Griffin’s penthouse, which he purchased for USD 238 million in 2019, then a record for a residential property sale in the United States. Griffin later responded that the act felt inappropriate and added that such messaging suggests New York may not be welcoming towards success or enterprise.
He further questioned whether policies like these could discourage individuals who support capitalism and economic growth. At the same time, Citadel has highlighted its financial contribution, with its employees and leadership paying nearly USD 2.3 billion in city and state taxes over the past five years, according to an internal communication shared earlier.
Other business leaders have echoed similar concerns. Bill Ackman stated that pushing away high net-worth individuals may not help improve New York City’s financial position. Barry Sternlicht also pointed out that states like Florida and Texas have been focusing on infrastructure development, while others are prioritising higher taxes, which could influence where companies choose to operate and create jobs.
In response, the mayor’s office clarified that the intention is to make the city more affordable for working residents while ensuring fair contribution from wealthier individuals. The administration maintained that broader tax reform is necessary to address structural issues in the system.
The proposed tax is expected to impact around 13,000 properties once implemented, with lawmakers currently evaluating how best to determine property values to meet a projected revenue target of USD 500 million.
However, real estate experts have raised concerns over valuation methods. Traditionally, property taxes are based on assessed values, which often lag behind actual market prices by 10 to 30 percent. This gap could result in many high-value properties falling below the taxable threshold.
Industry data suggests that fewer than 3,000 properties may qualify under current assessed values. In contrast, when market values are considered, the number could rise to nearly 11,800 properties, representing close to USD 180 billion in total value. Even then, some of these properties may be excluded if they are used as rental units.
To address this issue, experts have suggested setting adjusted thresholds that better reflect market value. One earlier proposal linked an assessed value of USD 300,000 to a market value of around USD 5 million, offering a possible framework for implementation.
Source Reuters
5th Jun, 2025
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