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How NYC's 'radical' pied-à-terre tax became a 'common sense' budget strategy
By
David Brand
Published Apr 15, 2026
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By
David Brand
Published Apr 15, 2026
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Twelve years ago, then-state Sen. Brad Hoylman-Sigal introduced a bill to impose a hefty tax on the opulent — but empty — condominiums cropping up in glimmering new high rises across New York City.
But year after year, the idea of a “pied-à-terre” tax on wealthy non-residents’ second, third or fourth homes drew stiff opposition from New York real estate interests and the proposal died multiple deaths.
Now, what was once seen as a progressive pipe dream is, in the words of Gov. Kathy Hochul on Wednesday, a “common sense plan” for closing the city’s budget gap — and a far more moderate approach to raising revenue than a broader tax on the wealthy coveted by Mayor Zohran Mamdani.
“When I first proposed a pied-à-terre tax over a decade ago, it was seen as radical,” Hoylman-Sigal, now Manhattan borough president, said in an interview. “Today, there’s greater understanding that the global superrich and oligarchs who use New York City real estate to park their investments should contribute to our city’s services to protect and safeguard those very investments.”
Hochul’s new proposal would assess a surcharge on second homes valued at $5 million and above. She said the tax could raise $500 million a year for the city.
“The people who own these pied-à-terres are not contributing in the same way that the 8.3 million New York residents do, and they benefit from everything New York City has to offer,” the governor said Wednesday. “Their property values keep rising while many sit underutilized or empty.”
The proposal has its share of powerful detractors, skeptics and those who warn that the tax will be difficult to enact.
The head of the Real Estate Board of New York says it will hurt the city’s housing market and property values. Fiscal policy experts say it's a poor stand-in for comprehensive property tax reform. And progressives say it doesn’t go nearly far enough when their true goal is to hike taxes on the wealthiest New Yorkers amid historic income inequality.
Mamdani himself has framed the proposal as a victory and a partial solution for plugging a $5 billion budget gap.
“Thanks to 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,” he said in a statement on Wednesday.
Over the past dozen years, attitudes about the tax have followed the changing landscape of New York City politics, the shifting influence of the real estate industry and a populist bent channeled through Mamdani’s steadfast calls to “tax the rich.”
Hoylman-Sigal’s 2014 legislation, backed by then-Mayor Bill de Blasio and then-Speaker Corey Johnson, withered amid opposition from influential business groups and the real estate sector. The proposal gained renewed momentum in 2019, fueled in part by a billionaire’s record-setting $238 million purchase of a Midtown penthouse. The legislation had the support of then-Gov. Andrew Cuomo and other state leaders, but died under pressure from the real estate industry, which warned of negative economic effects and lobbied aggressively against it.
James DeFillipis, a policy and planning professor at Rutgers University, said political attitudes have turned against the wealthy and made the tax more palatable.
“You'd be hard-pressed in a city with a median income of about $78,000 to find a massive amount of sympathy for people who have second homes worth $5 million,” DeFillipis said.
He said memories of the city’s elite fleeing the five boroughs during the pandemic have left a lasting impression, making average earners who couldn’t escape the city more willing to embrace tax hikes.
“The pandemic hits and everyone heads to the Hamptons, or the North Fork or the Catskills,” he said. “People decamped to their second homes. Most of us were not in a position to do that.”
The number of “pied-à-terres” has actually declined since the pandemic, according to city data. The city’s housing agency tallied about 59,000 homes held for “seasonal, recreational or occasional use” in its most recent survey three years ago – down from about 103,000 in 2021.
Hochul estimates the tax would apply to about 13,000 second homes.
REBNY officials have said the legislation could backfire by limiting new development, hurting construction workers and driving wealthy investors to other cities.
“The annual tax will weaken the city’s broader economy – all without addressing its fiscal problems in the first place,” President James Whelan said in a written statement.
In an interview, REBNY Vice President Zachary Steinberg also questioned how the city would enforce the proposed law when property values are contested and homes are typically owned by individual limited liability corporations or trusts, making it difficult to determine who owns what. Hochul’s plan is so far devoid of details.
“It’s going to be really hard on an annual basis to even figure out how to implement this,” Steinberg said.
Hoylman-Sigal, the original pied-à-terre sponsor, said the legislation will need to address those “challenges to implementation.”
And, he said, the tax should be a step toward a broader reform of the city’s distorted property tax system, which favors owners of expensive condos and homes in gentrifying areas, while imposing disproportionately high costs on apartments and homes in non-trendy neighborhoods.
Economists across the political spectrum agreed.
“While a pied-à-terre tax is less competitively damaging than other proposals, it’s very hard to design and implement well and ultimately it’s no replacement for holistic property tax reform,” said Citizens Budget Commission President Andrew Rein, whose organization calls for spending cuts and more fiscally conservative policies.
Emily Eisner, the executive director of the Fiscal Policy Institute, which supports progressive tax policies favored by Mamdani, said the pied-à-terre tax shows Hochul responding to pressure from the left, but doesn’t go far enough.
"I think this indicates that she is aware that people want to tax the rich,” Eisner said.
"It's not nothing," she added. “Nor will it provide the funding needed to enact the full scope of Mayor Mamdani’s affordability agenda."
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Kathy Hochul
Zohran Mamdani
housing
new york city
David Brand
David is a reporter covering housing for Gothamist and WNYC. Got a tip? Email [email protected] or Signal 908-310-3960.
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