New York City’s first-ever tax on luxury second homes takes effect tonight, marking a major shift in how the city taxes its wealthiest residents and their real estate holdings. The pied-à-terre tax, announced in April and signed into law by Governor Kathy Hochul in late May, begins its annual collection July 1, targeting nonresident owners of residential properties valued at $5 million or more.
Mayor Zohran Mamdani and Governor Hochul jointly proposed the tax on April 15, framing it as a way to close New York City’s budget gap while requiring the ultra-wealthy to contribute their fair share. The measure applies to single-family homes, condominiums, and co-ops that do not serve as a primary residence, with the city expecting to raise $500 million annually from the surcharge.
According to CNBC reporting from May 28, New York City’s new tax on second homes will more than double property taxes owed by many wealthy luxury apartment owners. The tax specifically targets nonresident owners—those with a separate primary residence outside New York City—and is designed to affect properties used as wealth storage rather than as homes.
The announcement in April highlighted specific examples of affected properties. Mayor Mamdani’s office noted that the tax would apply to holdings including billionaire Ken Griffin’s $238 million penthouse in Midtown, once the most expensive home sold in the United States, and Russian auto-dealer Alexander Varshavsky’s $20.5 million property purchased in cash, along with thousands more owned by foreign oligarchs and the global ultrarich.
Support for the tax has been strong among the general public. According to the city’s announcement, 93% of New Yorkers back the measure, reflecting broad agreement that wealthy out-of-city residents should contribute to the city’s fiscal health. Governor Hochul stated in the official announcement that “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.”
The tax was incorporated into New York State’s fiscal year 2026-2027 budget, which Governor Hochul signed on May 28, 2026. The inclusion in the state budget was essential, as the pied-à-terre tax required state-level legislation to take effect, despite being a city-focused policy designed to address Mayor Mamdani’s fiscal priorities.
Sources
- NYC Mayor’s Office — Official announcement of the pied-à-terre tax proposal, April 15, 2026, including revenue projections and affected property examples
- CNBC — Reporting on the tax’s passage and impact on property tax obligations for wealthy apartment owners, May 28, 2026
- Reuters — Coverage of Governor Hochul signing the state budget that includes the pied-à-terre tax, May 28, 2026
- Governor Kathy Hochul’s Office — Official announcement of the pied-à-terre tax proposal, April 15, 2026
