Tax The Rich Plan: NYC Targets Luxury Second Homes

New York City Mayor Zohran Mamdani on Wednesday backed a proposal to impose a new tax on luxury second homes owned by non-residents, a measure expected to generate at least $500 million annually.

The plan, introduced by New York Governor Kathy Hochul, would apply to residential properties in the city valued at $5 million or more that are not used as a primary residence. The so-called pied-à-terre tax targets ultra-wealthy individuals who own property in New York but do not pay local income taxes.

Mamdani, who campaigned on raising taxes on high earners, said the proposal fulfills a central promise of his administration.

“When I ran for mayor, I said I was going to tax the rich. Well, today, we’re taxing the rich,” he said in a statement, adding that the policy is aimed at the “richest of the rich” who “store their wealth in New York City real estate but don’t actually live here.”

Mamdani's video announcing the new tax. (Mayor's Office)

Hochul emphasized that the measure would not affect most residents, framing it as a way to ensure that wealthy non-residents contribute to the cost of public services.

“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,” she said.

According to state and city officials, revenue from the tax would be directed toward public services including childcare, sanitation, and public safety, as New York faces ongoing budget pressures.

The proposal reflects a shift from earlier resistance by Hochul to raising taxes and aligns with Mamdani’s broader effort to address affordability concerns in the city. Critics, however, have warned that higher taxes on luxury property owners could drive investment away from New York.