On April 15, Governor Hochul announced her support for an annual surcharge on New York City second homes valued at $5 million or more. Mayor Mamdani is backing it. The City Council Speaker called it "smart and sensible." REBNY called it a threat to the city's economy.

The proposed pied-à-terre tax would be an annually-recurring surcharge on residential properties in New York City — condos, co-ops, and one-to-three-family homes valued at $5 million or more, owned by people whose primary residence is outside the five boroughs.

The administration says it would generate at least $500 million a year. A sliding scale based on property value is still in the works.

This Idea Is Not New

The idea of a pied-à-terre tax has been circling Albany since 2014, when then-State Senator Brad Hoylman first introduced the legislation. Senate Republicans blocked it and it died in committee.

It came back in 2019, partly because Ken Griffin had just paid $238 million for an apartment at 220 Central Park South, describing it as "a place to stay when he's in town." The 2019 bill proposed a graduated surcharge starting at 0.5% on the value above $5 million, climbing to 4% plus a $370,000 fee at the top end. Governor Cuomo said he was open to it.

The bill never passed, in part because it required co-op boards to collect the tax from qualifying unit owners and remit it to the state — an unrealistic administrative burden on building communities that are typically volunteer-run via contracted management companies. This generated enough opposition to sink the bill.

The legislation was revived again during COVID when the state faced a $14 billion deficit. It stalled again. It's been reintroduced in every legislative session since, dying in committee each time.

What's different today is that the governor is driving it rather than observing from a distance. Hochul pointed to a property on West 57th Street worth over $100 million that she said had never been occupied. Indeed, the supertall towers along Billionaires' Row were in large part built for buyers who wanted a stable, prestigious, illiquid asset in a secure city, but not necessarily a home.

The Co-op Obstacle Hasn't Been Solved

The co-op administrative burden that’s killed this pied-à-terre tax idea in committee every year since 2019 hasn't gone away, and the current proposal hasn't publicly resolved how the collection mechanism would work.

There's also an unresolved constitutional question. Some tax attorneys have argued that singling out non-residents for a special surcharge could face a challenge under the interstate commerce clause. No court has ruled on it definitively.

The 2019 bill had a fully-drafted rate schedule, specific co-op collection mechanics (albeit unrealistic), and active committee consideration. It lacked a governor willing to drive it. The 2026 proposal has the governor, the mayor, and 93% public support according to City Hall and as of publication, no published rate structure, no resolved co-op mechanism, and no legislative text.

What Pied-à-Terre Owners Already Contribute

The 2023 NYC Housing and Vacancy Survey counted 59,000 units held for seasonal or occasional use — down from 75,000 in 2017, but still nearly 11% of what the city needs to close its housing shortage. This tax is aimed at the top portion of these properties.

New York City's income tax only applies to primary residents. An executive who moves to Palm Beach, keeps a $15 million Tribeca loft, and spends three or four months a year in the city pays zero city income tax while depending on the same police, fire, sanitation, and transit infrastructure that full-time residents fund. The argument isn't that they pay nothing. It's that what they pay doesn't scale with what the city makes possible for them, or with what they draw from it.

What they do pay is property tax, and they pay more of it than their primary resident neighbors.

The city's repeated renewal of the Cooperative and Condominium Tax Abatement, originally intended as a stopgap in 1996, reduces property taxes by 17.5% to 28.1% annually for qualifying owners. The eligibility requirement? Primary residences only. Pied-à-terre owners in the same building paying taxes on the same assessed value receive no abatement.

In FY2023, the city granted that abatement to 310,123 co-op and condo units. That year $659 million in foregone tax revenue benefitted primary resident owners while non-primary owners paid property taxes at full rate. The city is already extracting a premium from pied-à-terre owners. The proposed surcharge would add another layer on top of that.

Which raises a question nobody in Albany or City Hall is asking: the Cooperative and Condominium Tax Abatement expires on June 30, 2026. It’s been renewed eight times since 1996, always described as a temporary fix pending comprehensive property tax reform that has never arrived. Allowing it to lapse would return at least $659 million to the city budget. That’s more than what the pied-à-terre tax is projected to generate, with no new legislation required, no co-op collection mechanism to design, and no constitutional questions to litigate. There would certainly be political resistance, but the arithmetic and technical feasibility is worth stating plainly.

What $500 Million Really Means to the Bottom Line

New York City collected $81.4 billion in total tax revenue in fiscal year 2025. The proposed pied-à-terre tax adds $500 million, which is roughly one-tenth of a budget gap that currently stands at $5.4 billion for fiscal year 2027, and is projected to reach $10 billion or more in subsequent years.

The pied-à-terre tax would cover roughly one-tenth of the current gap. Ten precent, while meaningful, is not a solution.

The Question Worth Asking

The public debate focuses on questions of fairness and whether wealthy people would leave, but underneath is a more important one: what’s driving the New York City budget crisis? If it's primarily a revenue problem, then the pied-à-terre tax is a contribution. If the answer is something else — and it is — then $500 million (or even $659 million), however welcome, does not change the trajectory.

That’ll be the next post.

Brandon Mason is a residential real estate broker at Douglas Elliman, working across Manhattan and Brooklyn. This is the first post in a four-part series on New York City's fiscal crisis and what it means for the city's future.