Wealthy New Yorkers choose to rent despite billions in buying power as second-home tax reshapes Manhattan market

Manhattan's top-tier rents have surged 35 percent in a year as wealthy buyers opt to lease rather than purchase to avoid a second-home property tax introduced by New York City Mayor Zohran Mamdani.

According to the New York Post and other outlets, real estate firm Corcoran Group said Manhattan's median monthly rent hit a record $5,295 in July, based on its latest survey, as reported on Sept. 1 (local time). The citywide average monthly rent rose 10 percent over the past year to $6,555.

The average monthly rent for luxury rentals in the top 10 percent by sale price climbed 35 percent in a year to $17,464, or about $1,300 (1.78 million won) per square meter.

Listings priced above $50,000 (68.4 million won) a month more than doubled compared with 2025, while those above $100,000 (140 million won) a month increased sevenfold.

"The $100,000-a-month number has almost become normal," real estate broker Laura Klein told CNBC. She added that her clients have more than enough means to buy trophy homes priced between $20 million and $50 million, yet are choosing to rent instead.

Gary Malin, chief operating officer of Corcoran Group, told the New York Post that some landlords have converted luxury properties into rentals to avoid the tax. "Renting is attractive to wealthy people who want to avoid the responsibilities that come with ownership," he said.

New York's second-home property tax passed the state legislature in May. It applies to properties where the owner's primary residence is elsewhere. Notices were sent to roughly 17,000 owners classified as subject to the tax, and about 4,800 have applied for exemptions. Owners can be removed from the list by proving the property is their primary residence or that it is being rented out.

Controversy over the tax continues. President Donald Trump, who owns an apartment at Trump Tower in Manhattan and moved his primary residence from New York to Florida in 2019, has publicly criticized the measure — his apartment could be classified as a second home under the new tax. The Mamdani administration has spent recent weeks clarifying exactly who is subject to the tax after being flooded with inquiries. Citadel CEO Ken Griffin has also pushed back against it.