(The Center Square) — New York Gov. Kathy Hochul is proposing a New York City tax on second homes valued at more than $5 million to help Mayor Zohran Mamdani plug the city’s budget gaps.
The proposed “pied-à-terre” tax would target owners of high-end properties that in most cases are not their primary residences and that critics have long complained pay relatively low taxes compared to full-time New York residents.
If approved, it would affect roughly 13,000 homes, according to the Hochul administration, which has suggested a sliding scale that would mean higher taxes for homes valued at $15 million and above.
“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, a Democrat, posted on social media.
The proposal comes amid Mamdani’s threats to raise NYC property taxes if lawmakers in Albany don’t approve new taxes on corporations and the wealthy to help whittle down a projected $5.4 billion budget deficit.
Mamdani welcomed Hochul’s support for the new tax, saying it puts New York City “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 democratic socialist said in a statement.
But the plan faced immediate pushback from real estate groups and others who said the new tax would cost jobs, hurt the economy and drive more people out of the Big Apple.
“This annual tax will weaken the city’s broader economy,” Jim Whelan, president of the Real Estate Board of New York said in a statement. “It will not raise the amount of revenue expected, but will eliminate thousands of construction jobs, lower property values, and raise costs for New Yorkers.”
Mamdani rolled out his preliminary $127 billion budget in January that called for fulfilling a campaign pledge to raise taxes by 2% on millionaires and increase the combined corporate tax rate to just over 22% to reduce the budget deficit and foot the bill for his lefty political agenda. That includes universal child care, tuition for college and government-run grocery stores.
He has also threatened to increase property taxes across the board in New York City unless Albany lawmakers approve his controversial plan to increase taxes on the city’s top earners and corporations.
Both chambers of the state Legislature agreed on increasing taxes on the city’s wealthiest and corporations, but Hochul — who is running for reelection this year — rejected the plan, calling it a “non-starter” in a previous statement.
Hochul’s announcement came one day after the New York state Assembly and Senate approved a third budget “extender” to keep the government running after blowing past the April 1 budget deadline. Lawmakers are negotiating a final spending package behind closed doors.
