Governor Hochul Announces Pied-à-terre Tax Proposal for Luxury Second Homes Valued at $5 Million or More

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.

New York City Mayor Zohran Mamdani said, "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."

New York City Council Speaker Julie Menin said, "This is a smart, sensible proposal from Governor Hochul that will generate significant new revenue to help fund the vital services New Yorkers rely on. Coupled with the Council's proposals to secure additional revenue from the highest earners, this is the comprehensive approach we need to strengthen the City's fiscal footing and tackle the affordability crisis without burdening working New Yorkers."

Manhattan Borough President Brad Hoylman-Sigal said, "Governor Hochul is right to advance a pied-à-terre tax on ultra-luxury second homes in New York City. This is about fairness: the global superrich use Manhattan real estate to park their wealth, leaving these units vacant, while they benefit from the safety, stability, and services that make New York a secure place to invest. Especially on Tax Day, it is clear they should be paying their fair share. If you can afford a $5 million second home, you should appropriately contribute to the subways, schools, and public services that protect and sustain your investment."

Brooklyn Borough President Antonio Reynoso said, "New York City is not a playground for the ultra-rich. If you can afford a spare $5 million home in New York City, you can certainly weather a small tax increase to support essential city services. I applaud Governor Hochul for raising this proposal which is an important step toward balancing our city's budget and recognizes that the rich must pay their fair share.

Bronx Borough President Vanessa L. Gibson said, "As New York City continues to navigate its fiscal needs, it is important that we pursue solutions that protect essential services and maintain fairness. For communities like the Bronx, where residents rely on critical city services, this proposal is about ensuring stability, equity, and continued investment in the neighborhoods that need it most. I commend Governor Kathy Hochul for advancing a solution that prioritizes fairness and protects everyday New Yorkers."

Queens Borough President Donovan Richards Jr said, "If wealthy non-New Yorkers can afford to purchase multimillion dollar homes in our city, then they can afford to invest in the services that everyday working class New Yorkers need in order to make it here. This common sense proposal from Governor Hochul is not only welcome, it's necessary. I encourage its immediate passage."

Contact the Governor's Press Office