The proposal marks a political pivot for Hochul, who has spent months fending off progressive “tax the rich” demands while preparing to run for a second full term in an environment where Republicans are already attacking New York’s tax climate.
New York Gov. Kathy Hochul proposed Wednesday allowing New York City to impose a tax surcharge on second homes worth more than $5 million, a measure her office projected could raise at least $500 million annually as Mayor Zohran Mamdani works to close a multibillion-dollar budget gap.
The proposal would authorize the city to tax secondary residences — properties commonly known as pied-à-terres — owned by wealthy buyers who hold them as investment vehicles or occasional retreats. Hochul, a moderate Democrat who has repeatedly resisted calls for sweeping tax increases on high earners, framed it as a targeted alternative to broader levies.
“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,” Hochul said in a statement.
The governor said she would include the measure in the state budget, which remains under negotiation in Albany after the governor and Legislature missed an April 1 deadline.
Budget gap and competing pressures
Mamdani, who has called for a much broader tax increase on the wealthy since taking office as mayor, cast the announcement as progress. “One step closer to balancing our budget by taxing the ultra-wealthy and global elites,” he said in a statement.
At a separate forum Wednesday, appearing before a banner that read “Tax The Rich,” Mamdani said the measure would target 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,” according to the Associated Press.
Mamdani has been contending with a substantial budget shortfall. He initially put the gap at around $12 billion but later revised the figure to about $5 billion after accounting for savings and financial assistance from the state. The pied-à-terre surcharge, at the governor’s office’s projected minimum, would address a portion of the remaining gap.
Hochul has long argued that raising personal income or corporate taxes would push residents and businesses to lower-tax states, eroding the state’s tax base. Progressives have continued to press her publicly — chanting “tax the rich” at her appearances, including an annual political conference in San Juan late last year.
At a news conference Wednesday, Hochul said the proposal would help the city close its budget gap without forcing service cuts, while adding that Mamdani and the City Council must also identify additional savings on their own.
“Our goal is to get the city on stable ground, to close the gap so we can take the pressure off,” she said.
Republican response
Bruce Blakeman, a county executive in the New York City suburbs and Hochul’s Republican challenger in the fall governor’s race, quickly attacked the proposal.
“Kathy Hochul’s ‘No Tax Hike’ promise has expired faster than the families fleeing New York’s affordability crisis,” Blakeman said. “Unlike Hochul, I’ll actually keep my word when I’m governor: I’ll cut your taxes, slash your utility bills in half, and protect the American Dream.”
Hochul is seeking a second full term as she navigates competing demands from progressive allies, centrist voters, and a Republican challenge concentrated on taxes and affordability.