Qaplo - In a surprising twist, high-end real estate sales in Manhattan have surged in the past month, defying predictions that a new pied-à-terre tax would send wealthy buyers fleeing. According to data from Olshan Realty, 133 luxury apartment contracts were signed between April 14 and May 10, valued at $4 million or more — a 10% increase from the same period last year. The trend is particularly pronounced among ultra-high-end buyers, with sales of apartments priced over $10 million rising by an astonishing 80%. Despite this, real estate brokers and business leaders are sounding the alarm that the tax will have a devastating impact on the market. "The luxury market in Manhattan is showing no signs of slowing down," said Donna Olshan, president of Olshan Realty. "It's clear that the proposed pied-à-terre tax is not having the desired effect." The tax, which was first proposed by New York Mayor Zohran Mamdani and Governor Kathy Hochul on April 15, aims to impose an annual levy on non-primary real estate in New York valued at $5 million or more. Proponents claim it will raise $500 million in annual revenue and ensure that part-time residents "pay their fair share." However, critics argue that the tax will drive wealthy buyers away, causing a wealth flight that will ultimately harm the local economy. Real estate brokers have been vocal in their opposition to the tax, citing concerns about job losses and reduced tax revenue. Corcoran Group President Pamela Liebman told The Real Deal that her company has put several deals on hold, waiting for clarity on the tax's impact. Even some of Mayor Mamdani's critics are taking aim at his tactics, with Citadel CEO Ken Griffin labeling a social media video announcing the proposal as "in poor taste." Griffin's own experience is being cited by proponents of the tax. He purchased an apartment in Miami for $238 million last year and has vowed to expand the city's workforce if the tax is implemented. The tax also faces challenges around implementation, including how to value New York properties and address concerns about the city's antiquated assessment system. As the battle over the tax rages on, one thing is clear: Manhattan's luxury market will be watching with bated breath as the proposal makes its way through the legislature. Will the tax drive away the wealthy elite, or will it ultimately boost revenue for the state? Only time will tell.
