After New York City’s new mayor, Zohran Mamdani, was elected, he almost immediately began calling for higher property taxes, a surprise for many New Yorkers who voted for him. The only thing holding Mamdani back from his increased tax ambitions was Gov. Kathy Hochul, who has the final say on NYC’s new revenue initiatives.
One might imagine that Gov. Hochul would be skeptical of new taxation in New York, given that she was recently making the case for the wealthy residents who had moved away to come back.
But Hochul may have found a way to give Mamdani what he wants without breaking her own promise not to raise taxes on New Yorkers. Instead, she announced a plan to tax second homes in New York City. The so-called “pied-à-terre tax” could generate $500 million a year in taxes for New York City, at least until the billionaires paying it sell their second homes in the city. Hochul’s office announed:
Governor Kathy Hochul today proposed a pied-à-terre tax to support Mayor Zohran Mamdani’s efforts to close New York City’s budget gap. The proposal targets luxury second homes in New York City valued at $5 million or more, allowing the city to levy a yearly tax surcharge aimed at ultrawealthy, non-New York City residents. As New York City faces a significant budget gap, the Governor’s proposal will generate much needed revenue for the city without impacting every day New Yorkers.
The proposal is expected to generate at least $500 million a year in recurring revenue for the City. It builds on the Governor’s recent announcement that the state will provide an additional $1.5 billion for New York City in the FY2027 budget. As part of ongoing discussions, the City of New York has also committed to achieving significant savings in order to balance its budget.
In addition, earlier this year, Governor Hochul announced $1.7 billion in increased funding for universal child care, which included $1.2 billion directly for New York City’s launch of 2-care and expansion of 3-K. The Governor has increased funding support to New York City by 33 percent since taking office.
“New York City is the greatest city in the world, and the people who call it home should not be left carrying the burden alone,” Governor Hochul said. “As Governor, I understand the importance of stabilizing the city’s finances without compromising on essential services New Yorkers count on. If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker.”
A pied-à-terre tax is an annual surcharge on residential properties in New York City that are not occupied as a primary residence. The tax would ensure that those that own luxury homes, but do not live in the City or pay City income tax are still fairly contributing towards the funding of the essential services like policing and parks that make New York City a global destination. The tax would only apply to those homes that are not the primary residence of the owner or are not rented to a primary resident or occupied by the owner’s family.
The effort builds on the Governor’s record of delivering for working New Yorkers through tax reductions and various affordability measures including, her record expansion of the Child Tax Credit, her efforts in delivering a middle class tax cut that brought rates to the lowest level in 70 years and will deliver hundreds of dollars in average savings to nearly 80 percent of all tax filers when fully phased in, her reduction in the payroll mobility tax for small businesses, her championing of phased increases in the state minimum wage and more.
Responding to Hochul’s plan, Mamdani cheered on the effort, saying, “Thanks to the support of Governor Hochul, we are one step closer to balancing our budget by taxing the ultra-wealthy and global elites with a pied-à-terre tax — the first of its kind in our state. Alongside the governor, our administration is fighting every day to make sure we address this fiscal deficit fairly, where the wealthy contribute what they owe and our budget reflects our commitment to the working New Yorkers being priced out of our city.”
The Real Estate Board of New York (REBNY), a 130-year-old association representing New York’s realtors, came out in opposition to the plan, urging New Yorkers to oppose it by contacting the governor and state leaders. REBNY wrote:
New York is already the highest tax jurisdiction in the country, Governor Hochul has proposed a new pied-à-terre tax on second homes over $5M to fund $500M for NYC.
Why this hurts all New Yorkers:
- Property values drop across the market.
- Higher costs for co-op owners and residents.
- Job losses in construction and buildings.
- Less spending on retail, restaurants, theater, culture.
- Reduces investment in NYC.
- Doesn’t fix NYC’s budget gap.
- It crushes new housing development in the midst of a housing crisis.
This pied-à-terre tax weakens the economy, raises costs, and won’t deliver the revenue promised.
REBNY also posted a statement to X.com opposing the plan.
Statement from REBNY President James Whelan on Governor Hochul’s pied-à-terre tax proposal pic.twitter.com/YtkON09yZv
— rebny (@REBNY) April 15, 2026
Action Line: Hochul and Mamdani found a way to mitigate the pain their own constituents will feel in the short term, but the billionaires who own second homes in New York City could also be some of its biggest spenders, and luxury goods retailers and other businesses in New York that rely on the ultra-wealthy for survival could take a hit. The problem with ever-increasing levels of taxation is that eventually, you run out of other people’s money. Click here to subscribe to my free monthly Survive & Thrive letter.
