Gov. Kathy Hochul and Mayor Zohran Mamdani on Wednesday unveiled a proposed tax on luxury second homes in New York City.

The tax would apply to one- to three-family homes, condominiums and co-ops worth $5 million or more and owned by homeowners with a primary residence outside the five boroughs, City Hall said in a press release.

What You Need To Know

Gov. Kathy Hochul and Mayor Zohran Mamdani on Wednesday unveiled a proposed tax on luxury second homes in New York City

The tax would apply to homes worth $5 million or more

The two lawmakers said the tax is projected to bring in $500 million in annual revenue for the city, adding that it would be New York state’s first pied-à-terre tax

Projected to bring in $500 million in annual revenue for the city, the surcharge would be New York state’s first pied-à-terre tax, according to the release.

It would mark “a major step toward closing New York City’s budget gap while protecting the public services working New Yorkers rely on,” the release said.

The city is facing a $5.4 billion budget gap.

“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.”

Sources told NY1 the plan is a compromise on Mamdani’s proposal to tax the rich and raise corporation taxes.

The mayor spoke about the proposal at an unrelated event Wednesday morning.

“This is a tax on properties worth more than $5 million that are owned by people who do not reside in New York City,” he said. “The super-wealthy who can purchase properties and use them to store their wealth, to benefit from New York City’s real estate market, but not have to pay back into that same city that generates so much of that wealth in the way that they should.”

“What we are talking about is a recognition of the inequality that has permeated politics through the five boroughs of our city, through our country, through the world,” he added.