New Tax Proposed For NYC Properties-What To Know

Governor Kathy Hochul is proposing additional taxes on New York City homeowners with second homes worth $5 million or more, apparently giving in to Mayor Zohran Mamdani’s pressure to hike levies on the wealthy-at least in part.

The young Democrat recently said he would consider raising property taxes in New York City by 9.5 percent as a "last resort" to close the city's projected multibillion-dollar budget if Albany does not introduce higher income taxes on the city's richest residents.

The idea was widely interpreted as a way to pressure Hochul into passing a policy close to the Democrat socialist's heart, but one which the governor has called a "non-starter." Hochul, similarly to Governor Gavin Newsom in California, has expressed concerns that such measures would lead to an exodus of wealthy residents to lower-tax states like Florida and Texas.

While the governor and lawmakers in Albany are still to deliver the next state budget, Hochul's proposal to tax New York City's rich residents' second homes represent a shift in negotiations.

What Is Hochul Proposing?

The details of the governor's proposal still need to be ironed out, but it would likely involve different rates across multiple brackets and higher-value property would be taxed at a higher rate, The New York Times reported. The governor hopes the new tax would raise $500 million a year.

The proposal addresses an issue that has been repeatedly discussed in recent years, namely the high share of wealthy investors who own second homes in New York City.

According to the New York City Housing and Vacancy Survey, conducted every three years, there were about 59,000 units in 2023 in the city that were "held for seasonal, recreational, or occasional use." That was down from about 75,000 in 2017.

"If you can afford a multi-million dollar second home in New York City, you can afford to join its residents in supporting the greatest city in the world," Hochul wrote on Facebook on Tuesday.

The new tax could affect roughly 13,000 homes, The New York Times estimated.

How Has Mamdani Reacted To the Proposal?

While the proposal is not exactly the income tax hike Mamdani was calling for, the New York City mayor has been appreciative of Hochul's idea.

"Thanks to the support of 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-the first of its kind in our state," Mamdani said in a statement reported by The New York Times.

"Alongside the governor, our administration is fighting every day to make sure we address this fiscal deficit fairly, where the wealthy contribute what they owe and our budget reflects our commitment to the working New Yorkers being priced out of our city."

But others have already criticized the proposal, with the Real Estate Board of New York (REBNY) warning it "will weaken the city's broader economy, all without addressing its fiscal problems in the first place.”

“Its impact will reach far beyond a small group of owners," REBNY President James Whelan said in a statement reported by The New York Post.

"It will not raise the amount of revenue expected, will lower property values and raise costs. Albany should focus on policies that encourage investment and housing production to create a more affordable city, not ones that stifle its growth," he added.

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This story was originally published April 15, 2026 at 6:14 AM.