Video, Audio, Photos & Rush Transcript: 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.

VIDEO: The event is available to stream on YouTube here and TV quality video is available here (h.264, mp4).

AUDIO: The Governor's remarks are available in audio form here.

PHOTOS: The Governor's Flickr page will post photos of the event here.

A rush transcript of the Governor's remarks is available below:

 Good morning again. I'm also joined by Amanda Hiller, our Commissioner of Taxation and Finance who's here to help me with any answers to the topic that I'm talking about first. I want to talk about one of my priorities in this Budget and how New York State can help New York City with a budget gap that Mayor Mamdani inherited on day one.

And we all know that the economic and financial health of New York City has an outsized influence on the rest of the state and, indeed, the nation. That's why I understand, as Governor, the importance of stabilizing New York City's finances without compromising essential services that New Yorkers count on.

That's why I've already committed $1.2 billion toward the goal of universal child care. It's why I've already included in this Budget $1.5 billion to help close the gap and to cover priorities that I support. And that is why I'm proposing a common sense surcharge on high value second homes in New York City, commonly known as the pied-à-terre surcharge.

Now, I've also said that the city needs to take responsibility for finding savings to close the gap. To their credit, the Mayor and the City Council Speaker have already identified savings, and in my regular conversations with both of them, I have conveyed the importance of an ongoing dialogue as they continue to fare it out - more savings.

But the reality is where we are - hopefully closing in on our Budget and their budget is due May 1, the Executive Budget - the reality is that even with those actions, there will still be a Budget shortfall for the city to close. Now, there's been no shortage of ideas on how to deal with the gap. Some ideas, in my opinion, would risk eroding our tax base by driving out people and possible corporate headquarters, corporate jobs. Some ideas would cut services that New Yorkers rely on, raise property taxes on everyone or raise the cost [for] every New Yorker.

As far as I'm concerned, those are all non-starters. I've been very clear, and I said from the beginning: I will not consider income taxes on New York City residents nor corporate taxes on New York businesses. What we need is a common sense plan to achieve my clearly stated goals, and that's where the pied-à-terre surcharge comes in. I want to be crystal clear: This is not a tax on a residence, primary residence. If an owner lives there full-time or rents it out to a full-time tenant, the surcharge will not apply. This is a targeted surcharge on second homes and investor-owned apartments worth over $5 million; homes that in many cases sit vacant for a large part of the year - we have the inventory. They're part of our skyline, but those people are not part of our city.

We're talking about homes like the $105 million apartment down the street from here that's actually never been lived in. And here's why that matters: The property value of homes like that is driven by everything New York City has to offer - that's why it's a valuable place. But the people who own these pied-à-terres are not contributing in the same way that the 8.3 million New York residents do. And they benefit from everything New York City has to offer. Their property values keep rising, as I said, while many sit underutilized or empty.

So what I'm saying is simple and similar to what other international cities like Paris and Toronto have already adopted, because it's a matter of fairness to all those millions of residents who actually live here. Those who benefit from the city without living in a full-time capacity should contribute to the costs that it takes to run the city: public safety, world class parks, amenities, the roads, the subway system. This proposal simply ensures that they're contributing in a meaningful way to keeping New York City the greatest city in the world. And it goes also to help the city's budget gap.

I believe it'll protect working New Yorkers and ensure that everyone who has an address in New York City is investing in its continued success today and for an even greater future tomorrow.

Contact the Governor's Press Office