Manhattan’s wealthiest residents just found a new way to dodge Mayor Zohran Mamdani’s pied-à-terre tax: Don’t buy at all.
The city’s luxury rental market is shattering records as wealthy New Yorkers who could easily afford $20 million or $50 million trophy homes are choosing to rent instead, brokers say, a trend accelerating since the new tax on high-value second homes took effect.
Manhattan median rents hit $5,295 a month in July, a record high, up 6% compared with last July and unchanged from June’s plateau, according to a Corcoran Group report obtained by The Post, with the average rent citywide up 10% year-over-year to $6,555.
But the real action is at the top.
The average price for luxury rentals, the top 10% of the market, soared 35% over the past year to $17,464 a month, or roughly $121 per square foot.
The number of apartments renting for more than $50,000 a month has more than doubled compared with 2025. Units renting for more than $100,000 a month are up sevenfold.
“The $100,000-a-month number is almost normal now,” Laura Klein of Bespoke Real Estate, who recently brokered a Chelsea penthouse rental for $177,000 a month, told CNBC. “These are renters who want turnkey, unique, trophy properties.”
Two recent examples — a four-bedroom, five-bathroom penthouse in Tribeca at 161 Hudson St. just hit the market for a whopping $99,000 per month, listed with the Deborah Grubman Team at Corcoran. And a duplex penthouse with sweeping views overlooking Central Park at 988 Fifth Ave. listed for $95,000 per month, listed with Noble Black of Corcoran.
“To some degree, there are New York homeowners who’ve opted to lease out their luxury properties to avoid the pending pied-à-terre tax, thus increasing the pool of high-end rentals,” Gary Malin, chief operating officer at the Corcoran Group, told The Post. “Leasing appeals to wealthy people who want to avoid the responsibilities that come with homeownership. As I like to say, renting is like dating a home but buying is like marrying it. When there’s any uncertainty around the future of the city, people are less inclined to make a serious long-term housing commitment.”
Keyan Sanai, a broker at Douglas Elliman, said he didn’t handle any rentals approaching $100,000 a month this summer, with $35,000 the priciest deal he closed. But he noticed what he called “one of the more surprising trends” of the season.
Luxury apartments that historically took longer to rent because of a smaller tenant pool “moved remarkably quickly,” he told The Post, while several more conventionally priced Manhattan units took longer to find tenants than usual.
The pattern, Sanai said, “suggested that demand at the high end was unusually decisive, while renters in the broader market were becoming more price-sensitive and selective.”
Historically, renters were people who couldn’t yet afford to buy. Now the opposite is happening. A record low supply of high-end properties for sale has pushed cash-flush buyers into rentals while they wait for their dream home, and falling or flat resale prices have made ownership look like a worse investment.
Adding to the calculus is Mamdani’s pied-à-terre tax. The levy applies to one-, two- and three-family homes, condos and co-ops valued at $5 million or more where the owner’s primary residence is elsewhere.
For the first two tax years, properties assessed between $1 million and $3 million face a 4% annual surcharge, those between $3 million and $5 million face 5.25% and those above $5 million face 6.5%.
The tax is projected to raise at least $500 million a year for the city, and roughly 17,000 letters have already gone out to property owners who may owe it, though many can contest the designation by proving the home is a primary residence or a rental.
Brokers say the tax has added fresh fuel to the shift toward renting.
“The sharp increase in rentals following the pied-à-terre tax announcement suggests that some prospective purchasers may already be choosing flexibility over ownership,” Pam Liebman, president and CEO of the Corcoran Group, said.
Klein said none of the ultra-high-end rentals she handles are publicly listed. They move quietly through a small network of brokers to wealthy clients. She currently has a $175,000-a-month rental in Tribeca and a $95,000-a-month unit on the Upper East Side.
“There is so little inventory. And they don’t want to compromise,” Klein said of her clients, who she said can easily afford $20 million to $50 million trophy homes but are opting to rent instead.
The owners renting out these properties don’t need the income, Klein said, but are cashing in on demand.
“They say to me, ‘If the number is right, I’ll rent,’” Klein said. “These are properties that if they were on the market would be listed for tens of millions” of dollars.
The tax has not been without controversy. President Trump, whose Trump Tower apartment could fall under the new levy, has criticized it publicly, and Mamdani’s administration has spent recent weeks clarifying who is actually on the hook as confused homeowners flood the Department of Finance with questions.