Gov. Kathy Hochul (D-NY) proposed on Tuesday a new tax on wealthy earners who own second homes in New York City that are worth $5 million or more.
The move is intended to address the city’s estimated $5.4 billion budget deficit, which Mayor Zohran Mamdani is trying to solve with tax hikes for high earners and spending cuts. Mamdani has blamed the Eric Adams administration for the inherited budget crisis.
The governor wants to put the proposed yearly tax surcharge in the state’s $260 billion budget, which is already past its April 1 due date. The cost of the surcharge has not been determined yet, but Hochul hopes to bring in $500 million to the state government annually.
“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,” she said Tuesday. “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.”
Mamdani thanked the governor for proposing the tax.
“Thanks to the support of Governor Hochul, we are one step closer to balancing our budget by taxing the ultrawealthy and global elites with a pied-à-terre tax,” he said, referring to a tax on secondary homes that are not used as the owner’s primary residence.
Hochul has generally not favored raising taxes on wealthy individuals or large corporations this year, putting her at odds with Mamdani. However, she has made an exception for multimillion-dollar second homes owned by people who do not pay state or city income taxes because their primary residences are located elsewhere.
Mamdani has led calls for tax increases on households that make over $1 million per year. He is also seeking to raise the corporate tax rate for the wealthiest companies from 7.25% to 11.5%.
After entering office, the mayor has lobbied Hochul and state lawmakers to consider increasing taxes on households and corporations. If his demands are not met, he vowed to impose a 9.5% property tax hike to close the projected budget deficit.
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Hochul’s Republican opponent in the 2026 gubernatorial race, Nassau County Executive Bruce Blakeman, criticized the tax proposal in a statement.
“Kathy Hochul’s ‘No Tax Hike’ promise has expired faster than the families fleeing New York’s affordability crisis,” Blakeman said. “Whether you’re affluent or middle-class, Hochul and Mamdani are looking to hike your property taxes and take half your house through a new inheritance tax. It’s a war on homeownership and the American Dream. 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.”
