What Is the Pied-à-Terre Tax? 5 Things to Know About Hochul’s Proposal.

Key Points:

• Governor Kathy Hochul proposes a new tax on New York City second homes valued at $5 million or more to help close a $5.4 billion city budget gap and address income inequality by targeting ultrawealthy non-resident owners.
• The pied-à-terre tax would be an annual surcharge on high-value properties that are not the owner's primary residence, including those owned by out-of-state residents and investors, but excluding fully rented properties.
• The proposal faces a changed political climate compared to 2019, when a similar effort was blocked by real estate lobbying; current support includes Mayor Zohran Mamdani, who campaigned on affordability issues.
• Details remain unclear, such as whether New York City residents owning multiple apartments would be subject to the tax, but it would apply to both new buyers and longtime owners benefiting from property value increases.
• The surcharge would be in addition to existing property taxes, aiming to generate revenue from the city's wealthiest second-home owners to help address budget shortfalls.