Hochul Pitches Lawmakers a Pied-à-Terre Tax on Homes Valued at $1M and Up

Gov. Kathy Hochul has submitted a proposal to Albany lawmakers to approve a structure for the proposed pied-à-terre tax on non-primary residences in New York City.

While Hochul and Mayor Zohran Mamdani have targeted second homes valued above $5 million, Hochul’s office has started the tax at a 4 percent rate for properties with a market value above $1 million, according to The New York Times.

As the value of pied-à-terre apartments and second homes reaches $5 million, owners will then have to pay a 6.5 percent tax unless they live in the properties full time. The tax is intended to raise $500 million for the state.

The governor’s office lowered the threshold to $1 million in market value, reasoning that luxury apartments often trade at a much higher price than what they are appraised at. One example provided by the Times was a property with a value estimated at $4.2 million, but which sold for more than $135 million in 2024.

A 4 percent tax on a home with a sale value of $18.5 million would equate to about $45,115 in surcharges to the state, a framework that will be in place for only two years until the state government can come to a more permanent agreement, the Times reported.

Hochul’s office did not immediately respond to a request for comment.

Hochul and Mamdani announced the effort to tax non-primary homes in New York City in mid-April, following a viral video post to social media by the mayor calling out Citadel CEO Ken Griffin on his purchase of a $238 million penthouse in Manhattan.

Griffin responded to the video by announcing that he would expand his office footprint in Miami rather than growing Citadel’s operations in New York City, Commercial Observer reported in late April.

Vornado Realty Trust’s Steven Roth publicly supported Griffin in his outrage during a first-quarter earnings call on May 5. Vornado is partnering with Griffin, along with Rudin, in the development of a 62-story, 1.9 million-square-foot office tower at 350 Park Avenue.

Hochul and Mamdani have been acting in lockstep to raise funds in light of the city’s $10.5 billion budget deficits, which Mamdani said earlier this week have effectively been zeroed out thanks to cost savings in the municipal budget for fiscal year 2027, as well as contributions from the state.

However, noticeably missing in Mamdani’s $124.7 billion budget announcement Monday were any details about the pied-à-terre tax, which is the purview of the state.

Mark Hallum can be reached at mhallum@commercialobserver.com.