When Zohran Mamdani won the New York City mayoral race in November 2025, he ran on a mandate to tax the rich and protect working New Yorkers. Five months into the job, he’s getting his first real test of whether he can keep up with that promise.<\/p>\n
Facing a $12 billion (1) budget gap (2), his opening move was proposing a 9.5% property tax hike on homeowners, which would raise $3.7 billion toward the shortfall. He called it a “last resort” if New York State wouldn’t come to the table to provide financial help.<\/p>\n
Must Read <\/p>\n
In the end, the state offered $4 billion in aid. So on Tuesday, Mamdani was able to drop the property tax hike entirely (3) as he unveiled a $124.7 billion executive budget for fiscal year 2027, noting he “refuses to slash services.”<\/p>\n
“It has not been easy, but we have balanced the budget, and we have done so without placing the burden on the backs of working New Yorkers,” he said at a press conference at city hall (4).<\/p>\n
Why a 9.5% hike was always a long shot <\/p>\n
New York City’s property taxes are the city’s largest single revenue source, bringing in $30 billion every year \u2014 more than any other levy, including income and sales taxes (5).<\/p>\n
The median homeowner pays $6,317 per year in property taxes (6) in the city. A 9.5% hike would add about $600 a year to that. With a cost of living that makes New York one of the world’s most expensive cities, that’s a hit (7) on pocketbooks.<\/p>\n
City Council Speaker Julie Menin slammed the door on the tax hike right away (8). In principle, Mamdani could raise property taxes without the state’s sign-off, but he would need council’s support without Menin’s vote, the motion would fail.<\/p>\n
Still, looks like the property tax proposal was Mamdani’s leverage to get New York State to negotiate.<\/p>\n
How Mamdani closed the gap <\/p>\n
Mamdani filled a $5.4 billion budgetary hole in many ways, according to Bloomberg Tax (9). His chief savings officers were able to dig up $1.77 billion in efficiencies (mostly by not filling vacancies), along with tweaks to education mandates and subsidies (10).<\/p>\n
The single largest piece is $2.3 billion saved over the course of two years from pension amortization. Since 2013, the city has been trying to play catch-up (11) on the funds it needs to cover city employees’ pensions. Mamdani’s move would let the city spread out additional pension contributions over more years, easing this year’s budget pressure.<\/p>\n
Story Continues <\/p>\n
The pension amortization requires state approval and sign-off from the city’s five pension funds (12). Even if it passes, it’s an imperfect solution as the total pension debt just gets deferred, not erased.<\/p>\n
Read More: From $10 to $100K: Build your real estate empire using the same strategies as the 1%<\/a><\/p>\n Perhaps the most controversial way Mamdani’s administration proposes to balance the budget is with the pied-\u00e0-terre tax, projected to generate $500 million a year (13), though details are unclear pending state approval.<\/p>\n Governor Kathy Hochul introduced the idea last month as a targeted surcharge on luxury second homes valued over $5 million and owned by non-New York City residents who spend little time in the city.<\/p>\n Mamdani supported the idea on social media, literally calling out billionaire Citadel CEO Ken Griffin as a target in front of his $238-million penthouse. In response, Griffin pushed back hard (14).<\/p>\n “With 1% of New York taxpayers paying 45% of all the taxes, the city is in a precarious position if they make those who create value feel like they’re best off moving their businesses and their lives to other jurisdictions,” Griffin told CNBC (15).<\/p>\n High earners leaving the city would reduce the tax base Mamdani is counting on (16).<\/p>\n The budget still needs council and state approval, and even if it’s approved, Mamdani still has to contend with the structural problems that created the budgetary shortfalls.<\/p>\n What this means for New York City homeowners <\/p>\n For now, the 9.5% property tax hike is off the table.<\/p>\n Long term, it’s not so simple. Mamdani stepped into a $12 billion structural deficit and a tax system leaning heavily on the city’s wealthiest residents, challenges that won’t vanish from a single budget cycle.<\/p>\n If the pied-\u00e0-terre tax and pension amortization don’t get approved, the property tax hike could be back on the table at some point.<\/p>\n Article Sources <\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>.<\/p>\n Time (1)<\/a>; City of New York (2)<\/a>,(4)<\/a>,(8)<\/a>; Bloomberg (3)<\/a>,(13)<\/a>; Tax Bills NYC (5)<\/a>; Cooperator News (6)<\/a>; Yahoo (7)<\/a>,(10)<\/a>; Bloomberg Tax (9)<\/a>; The New York Times (11)<\/a>; Politico (12)<\/a>; Reuters (14)<\/a>; CNBC (15)<\/a>; The Daily Economy (16)<\/a><\/p>\n This article originally appeared on Moneywise.com<\/a> under the title: Mamdani scraps unpopular 9.5% property tax hike \u2014 but it could return if other solutions to NYC’s $12B deficit fail<\/a><\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"When Zohran Mamdani won the New York City mayoral race in November 2025, he ran on a mandate…\n","protected":false},"author":2,"featured_media":232899,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[19077,9,24,55,54,56,5592,58811,82],"class_list":["post-232898","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york-city","tag-julie-menin","tag-new-york","tag-new-york-city","tag-new-york-city-headlines","tag-new-york-city-news","tag-ny","tag-property-tax","tag-tax-hike","tag-zohran-mamdani"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/232898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=232898"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/232898\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/232899"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=232898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=232898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=232898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}