Hochul, Mamdani Push Tax on Luxury Second Homes in NYC

NEW YORK CITY—New York Gov. Kathy Hochul and New York City Mayor Zohran Mamdani are backing a tax on owners of second homes in the city that are worth $5 million or more.

Announced by Hochul on April 14, the proposal aims to raise $500 million from nonresidents to help New York City cover its $5.4 billion budget deficit. Speaking April 15 at a Tax Day Forum at City University of New York Graduate Center, Mamdani described the current system as unfair and said the wealthy should contribute more to the city.

He characterized owners of such homes as “the super wealthy who can purchase properties and use them to store their wealth, who can benefit from New York City’s real estate market but not have to pay back into that same city that generated so much of that wealth in the way that they should.”

Hochul’s office said in a press release that the tax targets those who own luxury homes in the city but do not live in them.

“The property value of homes like that is driven by everything New York City has to offer,” said Hochul on X. “Those who benefit from the city without living in a full-time capacity should contribute to the cost that it takes to run the city.”

Officials said owners could avoid the tax by having a full-time tenant in the home.

“Too many ultra-wealthy second homes sit empty most of the year, part of our skyline but not part of this city,” Hochul said on X. “Anyone treating New York City like an investment should be contributing to what makes it valuable.”

City Council Speaker Julie Menin also expressed her support, writing on X, “A smart, sensible step from @GovKathyHochul to generate revenue for the services New Yorkers rely on.”

The Real Estate Board of New York expressed skepticism about the amount of revenue such a measure can raise, suggesting that it would hurt the broader economy and the housing market.

“Its impact will reach far beyond a small group of owners,” board President James Whelan wrote on X. “It will not raise the amount of revenue expected, but will eliminate thousands of construction jobs, lower property values, and raise costs for New Yorkers.”

In 2019, New York state officials considered implementing an annual tax on luxury second homes but ultimately elected to impose a transfer tax on the sale of properties worth $2 million or more, also known as a mansion tax.

In a 2019 report, the Fiscal Policy Institute estimated that New York City could raise $490 million and up to $650 million by adopting the tax on luxury second homes. The study also found such a tax could help expand housing supply by encouraging owners to rent out their vacant homes to local residents to avoid the tax.

The proposal was part of state officials’ effort to help New York City cover its budget deficit. Hochul’s office said the city of New York “has also committed to achieving significant savings in order to balance its budget.”

Correction: A previous version of this article misspelled the name of Real Estate Board of New York President James Whelan. The Epoch Times regrets the error.