Governor Kathy Hochul on Wednesday proposed to install the state’s first pied-à-terre tax, a major step toward closing New York City’s $5.4 billion budget gap.
The pied-à-terre tax will levy an annual surcharge on one- to three-family homes, condominiums and co-ops valued above $5 million when owners have a separate primary residence outside of New York City.
“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," Hochul said in a statement. "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.”
The measure targets wealthy out-of-city residents who use New York City real estate as a vehicle for wealth storage rather than as primary homes. Thex tax is estimated to generate $500 million in annual revenue, officials said.
The proposal is one vehicle to close the city's $5.4 billion budget gap. The mayor earlier had said he would seek to increase property taxes as a last resort, a very unpopular idea throughout the city.
“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," Mamdani said. "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."
City Council Speaker Julie Menin said she was supports the proposal.
"This is a smart, sensible proposal that will generate significant new revenue to help fund the vital services New Yorkers rely on," she said in a statement.
