Hochul’s New York City Pied-à-Terre Tax Plan Draws Fire From GOP, Praise From City Leaders

New York Governor Kathy Hochul is proposing a new pied-à-terre luxury tax on those who own second homes in New York City valued at $5 million or more, while New York Mayor Zohran Mamdani continued his calls for a tax on those making $1 million or more. “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,” Ms. Hochul said in a statement.Ms. Hochul believes her pied-à-terre surcharge – which would only apply to such apartments within New York City’s five boroughs – could raise roughly $500 million per year and help the city address its purported $5.4 billion budget shortfall that Mr. Mamdani, a Democratic Socialist, says can be addressed by taxing the wealthy. This new tax was “more palatable” to Ms. Hochul than Mr. Mamdani’s aggressive push to tax large corporations and people earning at least $1 million per year, according to the New York Times, which first reported the plan. Such a plan would require the approval of New York’s state legislature.Thousands of luxury apartments across New York City, many bought for eight-figure sums, are owned by overseas buyers who often treat them as a safe-haven investment rather than a home. Others belong to wealthy New Yorkers who establish residency in low-tax states like Florida while maintaining luxury pied-à-terres in New York.In a press conference on Wednesday, Ms. Hochul defended her proposal and said it was not her way of kowtowing to Mr. Mamdani’s push to tax the rich.“I feel no need to appease anyone,” Ms. Hochul said. “I’m a partner to this mayor, so I have found a path.”In a joint op-ed published Wednesday in The Guardian, Mr. Mamdani, writing with Columbia University professor Joseph E. Stiglitz and Paris School of Economics professor Gabriel Zucman – both harsh critics of economic inequality — called the pied-a-terre tax “progress” but continued his calls to tax high-earners and billionaires, which he stressed was “not radical.”“What is radical is allowing a system where extreme wealth exists alongside widespread hardship – and where those billionaires can in effect opt out of contributing to the society that made their success possible,” Messrs. Stiglitz, Zucman, and Mamdani wrote.Aides to Ms. Hochul told the Times that the surcharge would likely be structured on a sliding scale, with higher-value properties taxed at a higher rate. Ms. Hochul’s proposal is currently being negotiated with state legislative leaders and is expected to be folded into the state budget.New York City Council Speaker Julie Menin praised the plan as a “smart, sensible proposal that will generate significant new revenue to help fund the vital services New Yorkers rely on.”Critics, however, went after Ms. Hochul’s perceived turn from her earlier “No Tax Hike” pledge. Nassau County Executive Bruce Blakeman, a Republican who is also running against Ms. Hochul for governor, called the tax “a war on homeownership and the American Dream.”“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,” Mr. Blakeman said in a statement.The Real Estate Board of New York said in a statement that the impact of Ms. Hochul’s new tax “will reach far beyond a small group of owners.”“It will not raise the amount of revenue expected, will lower property values and raise costs,” REBNY president James Whelan said in a statement.

Hochul’s New York City Pied-à-Terre Tax Plan Draws Fire From GOP, Praise From City Leaders

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