Gov. Kathy Hochul plans to seek state budget legislation allowing New York City to impose a property tax surcharge on non-primary residences valued at $5 million or more, a proposal her administration says could generate at least $500 million a year in recurring revenue for the city.
The plan seemed to be a victory for Mayor Zohran Mamdani, who has been pushing for the governor to raise taxes on the city’s highest earners and most profitable corporations to fund his agenda and help the city close a $5.7 billion budget gap. City Council Speaker Julie Menin also applauded Hochul’s plan, calling it “a smart, sensible proposal” that would generate significant new revenue to help fund city services.
Hochul cast the measure, first reported by The New York Times and confirmed to amNewYork, as a way to shift more of the burden onto wealthy property owners whose New York City homes sit empty for much of the year.
“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.”
A 2023 Housing and Vacancy Survey conducted by the city’s Department of Housing Preservation and Development found about 58,800 units held for seasonal, recreational or occasional use in NYC, a category that includes second homes, but the report does not say how many were worth $5 million or more.
A source familiar with the proposal said Hochul will include legislation in the budget that, if approved by the Legislature, would allow the city to levy the surcharge.
The source said additional details still need to be worked out with lawmakers and city officials, but the administration expects the plan would use multiple tax brackets and raise at least $500 million annually.
Mamdani praised Hochul’s proposal, calling it a step toward closing the city’s budget gap by taxing “the ultra-wealthy and global elites with a pied-à-terre tax.”
“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,” Mamdani said.
Menin, however, said the property tax surcharge should be part of a broader package. She pointed to the Council’s proposals to raise additional revenue from top earners, including changes to PTET and adjustments to the UBT/PIT credit, and said that approach would strengthen the city’s finances without adding pressure on working New Yorkers.