New York State Considers Tax on Millionaire Pied-à-Terres

New York State and City officials have taken a landmark step toward closing the city’s budget gap with the announcement of the state’s first-ever pied-à-terre tax, targeting ultrawealthy and global elites who own luxury second homes in New York City but do not reside there full-time. The proposal, unveiled on April 15, 2026, by Governor Kathy Hochul and Mayor Zohran Mamdani, will impose an annual surcharge on residential properties valued at $5 million or more, provided the owner maintains a separate primary residence outside the city.

The pied-à-terre tax is designed to generate at least $500 million in annual revenue, a significant contribution to addressing New York City’s fiscal challenges. The measure has broad public support, with 93% of New Yorkers backing the initiative, according to official statements. It marks the first time such a tax has been enacted in New York State, following more than a decade of discussions and proposals from previous administrations.

The tax will apply to one- to three-family homes, condominiums, and co-ops valued above $5 million, specifically targeting those who use New York City real estate as an investment or wealth storage vehicle rather than as a primary residence. Among the properties expected to be affected are some of the most expensive in the country, including billionaire Ken Griffin’s $238 million penthouse in Midtown and Russian auto-dealer Alexander Varshavsky’s $20.5 million property, both purchased in cash. The tax is projected to impact thousands of properties owned by foreign oligarchs and the global ultrawealthy.

Governor Hochul emphasized the importance of stabilizing the city’s finances without compromising essential services for New Yorkers. “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,” Hochul said. “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.”

“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. 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.”

Mayor Zohran Mamdani

The proposal is part of a broader effort to ensure that those who benefit from New York City’s infrastructure, services, and global reputation contribute to its upkeep. The tax is expected to complement other recent state commitments, including an additional $1.5 billion for New York City in the FY2027 budget and $1.7 billion in increased funding for universal child care, with $1.2 billion directly allocated to the city’s launch of 2-care and expansion of 3-K programs.

The pied-à-terre tax is not only a fiscal measure but also a symbolic one, reflecting a growing consensus that the wealthiest individuals and entities should share in the costs of maintaining the city’s quality of life. As New York City continues to face economic pressures, this tax is seen as a critical step toward ensuring that the burden of public services is distributed more equitably among all residents and property owners.