(The Center Square) — New York real estate groups are urging Albany lawmakers to reject Gov. Kathy Hochul’s plans to set a new 4% tax on the sale of second homes to plug New York City’s budget gaps.
Hochul pitched the plan as part of an aid package to help New York City deal with an estimated $12 billion revenue shortfall over the next two years, and on Thursday released more details about the new tax that could impact more than 10,000 properties in the city.
The new tax is tucked in the $268 billion state budget for the next fiscal year, which is expected to be taken up by lawmakers next week. The budget was originally due April 1, but the state has been operating on a series of interim spending plans.
“We’re asking some of the wealthiest people in the world to contribute a bit more to generate targeted revenue while avoiding unintended consequences for New York’s tax base,” Hochul’s press office said in a statement Thursday.
But the Real Estate Board of New York, which opposes the plan, has launched a new campaign hoping to convince lawmakers to vote against the measure.
The group says the plan, if it survives in the final budget, would “drive down property values, create higher costs for co-op owners and residents, and deter investments while crushing new 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,” the group said in an email to supporters urging them to contact their representatives. “The Governor and state leaders need to hear from you.”
In a suggested letter, the group urged voters to tell lawmakers in the state Assembly and Senate that they are “deeply concerned” about the tax proposal and urge them to reject it when it comes up for a vote next week.
“While it may sound appealing, an annual tax like this will hit the pocketbooks of everyday New York residents,” the letter said. “That’s because by imposing a significant new annual cost, the tax will reduce demand for homes and lower property values for primary residents and second home owners alike.”
Under Hochul’s plan, the new 4% tax would cover homes worth over $5 million and taxed at their assessed market value. Properties valued higher than $15 million would face additional surcharges.
The governor rolled out her pied-à-terre plan in April in response to New York City Mayor Zohran Mamdani’s threat to increase property taxes across the board if Albany lawmakers didn’t agree to his proposal for a new wealth tax and higher taxes on corporations to balance his first budget.
Mamdani said the new tax, which is expected to drum up $500 million in annual revenue, will force part-time New Yorkers to “pay their fair share” of the city’s operating costs.
