How Mamdani's plan to raise NYC property taxes could impact Long Island

Real estate experts predict most New York City residents will stay put if Mayor Zohran Mamdani’s proposed property-tax increase to decrease a budget deficit goes through.

And why not move to Long Island? Because property taxes here are so much higher.

To illustrate the gulf, real estate lawyer Jeff Gold, of Bellmore — a former Nassau County assessment review commissioner and member of the board of assessors — did a quick online search this week of real estate listings.

In seconds, he found a one-family brownstone in prime Park Slope, Brooklyn — property tax: $8,000 a year on a $4.5 million property. The property taxes on a comparable property in, say, Oyster Bay, where a Park Slope family might move, could be $50,000 or $60,000, he said. 

The average Long Island homeowner pays a median of roughly $10,000 a year, according to the nonpartisan nonprofit Tax Foundation.

Mamdani’s increase on an average home would be roughly $700 a year, according to the Citizens Budget Commission’s Ana Champeny, the group’s vice president for research.

And so Gold is skeptical.

"People aren’t leaving the city for $700," he said, and in addition to housing costs, living on Long Island all but requires buying a car — or cars.

Champeny said the city doesn’t publish a median but the average in the city on a typical family home is about $7,000.

Mamdani threatened on Tuesday that unless Gov. Kathy Hochul agrees to greenlight his demand for wealth taxes on the richest city residents and corporations, he would seek to raise the only tax New York City controls without Albany’s approval, the property tax.

That would mean higher taxes on more than 3 million houses, condos and cooperative apartments, and 100,000 commercial buildings. Even among New Yorkers who don’t pay property taxes directly, Mamdani’s plan could also mean higher rent, since landlords can pass along costs to tenants.

Mamdani said the city’s $5.4 billion deficit in his proposed $127 billion budget — which must be balanced under a law passed in the aftermath of the city almost going bankrupt in the 1970s — for the upcoming fiscal year cannot be closed without one of those two options. (The budget gap spans the next two fiscal years.)

"If we do not go down the first path," Mamdani said, referring to his preferred wealth tax, "the city will be forced down a second, more harmful path. Faced with no other choice, the city would have to exercise the only revenue fully within our own control: we would have to raise property taxes."

Mamdani, who did not propose cutting spending, wants to boost property taxes 9.5%, to 13.45%, from the current 12.28%. But like Long Island’s property tax calculations, New York City determines a property’s taxes via a byzantine process that can vary widely, has been long almost-universally criticized, and can lead to less expensive properties taxed at a higher rate than more expensive ones.

Neither tax increase will, on its own, fund implementing Mamdani’s platform that swept him into office — free buses, free child care, government-run grocery stores, a police-supplementing Department of Community Safety.

For now, the prospects for both the property-tax hike and the new wealth tax seem grim. 

Hochul, who is running for reelection, has for months resisted calls to raise taxes. And City Council Speaker Julie Menin, whose chamber must approve the annual budget, said this week she doesn’t believe property taxes should rise.

East End real estate agent Bridget Elkin said housing purchases in the city and on Long Island are driven "far more by overall housing costs, inventory, lifestyle, and job access than marginal tax changes." 

"On its own," Elkin said of Mamdani’s proposal to hike the property tax, "this is unlikely to materially shift buyer behavior."

As for one of the reasons a family might want to move to Long Island, Elkin cited the private-school tuition a city family might pay per child, which could be in the mid-five figures.

"When you compare that to the private-school alternative, which can easily run $40,000 to $70,000 per child annually in the tristate area, many families, especially those with multiple children, can justify higher property taxes as a form of prepaid education," she said.

Raising property taxes wouldn't be enough to close the budget gap, Mamdani said, adding he would need to tap the city's rainy-day funds.

Mamdani’s wealth tax would increase the rate by 2% for income over $1 million and push up the top corporate tax rate to 11.5% from the current 7.75%. Both of the options proposed by Mamdani — the property tax increase and the use of the city's rainy-day fund, or the wealth tax — would address the budget deficit.

Judi A. Desiderio, managing partner at William Raveis Real Estate, believes there will be some marginal movement to the Island, but not much.

"If you’re a city dweller, you’re a city dweller and if you’re a New Yorker, it’s going to tick you off, but it’s not going to make you move," she said. "But the marginal people will reassess where they live."

By Matthew Chayes

matthew.chayes@newsday.comchayesmatthew

Matthew Chayes, a Newsday reporter since 2007, covers New York City.