Governor Kathy Hochul is advocating for an additional tax on owners of luxury secondary residences in New York City, aligning with the city’s young socialist mayor’s push for higher taxes on the state’s wealthiest individuals.
Hochul has suggested implementing an annual surcharge, known as the “pied-à-terre tax,” targeting second homes in New York City valued at $5 million or more. This initiative is designed to ensure that the ultra-wealthy contribute more to the city’s finances.
“If you can afford a multi-million dollar second home in New York City, you can afford to join its residents in supporting the greatest city in the world,” Hochul stated in a recent announcement.
Although it remains uncertain how much revenue this new tax would generate, the proposal is modeled after a similar system in Rhode Island.
According to sources, approximately 13,000 homes would be impacted. As initially reported by The New York Times, the tax rate would increase for properties valued at $15 million and again for those at $25 million.
The Real Estate Board of New York has criticized Hochul’s proposed tax, arguing that it could negatively affect property values across the city.
“This annual tax will weaken the city’s broader economy — all without addressing its fiscal problems in the first place. Its impact will reach far beyond a small group of owners,” REBNY President James Whelan said in a statement.
“It will not raise the amount of revenue expected, will lower property values and raise costs. Albany should focus on policies that encourage investment and housing production to create a more affordable city, not ones that stifle its growth,” Whelan continued.
The proposal comes as New York State stares down massive federal cuts to Medicaid and Mayor Zohran Mamdani presses Albany for a $5.4 billion bailout that he claims is to fill a massive budget shortfall.
Mamdani has called for sweeping tax increases, including to corporations and households making $1 million or more, among others.
He’s threatened to impose a nearly 10% property tax hike if his demands in Albany are not met.
For her part, Hochul has shied away from raising corporate or income taxes despite support from others in leadership in the statehouse.
