Hochul targets $5M second homes with new NYC tax proposal

• Gov. Hochul proposes new annual tax on second homes worth $5M+
• Roughly 13,000 properties could be impacted across NYC
• REBNY warns plan could hurt property values and investment

What Hochul is proposing for NYC homeowners

Kathy Hochul is pushing a new tax aimed at high-end second-home owners in New York City, introducing what’s commonly referred to as a pied-à-terre tax.

The proposal would apply to non-primary residences valued at $5 million or more, with higher tax tiers kicking in at $15 million and $25 million.

“If you can afford a multimillion-dollar second home in New York City, you can afford to join its residents in supporting the greatest city in the world,” Hochul said.

What the tax could mean for luxury property demand

The measure is expected to impact around 13,000 properties, primarily in Manhattan’s luxury condo market. These units are often owned by out-of-state or international buyers who use them as secondary residences.

For landlords and investors, this raises a key concern. Additional taxes on non-primary residences could reduce demand from high-net-worth buyers, a segment that has historically supported pricing at the top of the market.

What the real estate industry is saying

Real Estate Board of New York strongly opposed the proposal, warning of broader economic consequences.

“This annual tax will weaken the city’s broader economy all without addressing its fiscal problems in the first place. Its impact will reach far beyond a small group of owners,” said James Whelan.

“It will not raise the amount of revenue expected, will lower property values, and raise costs. Albany should focus on policies that encourage investment and housing production to create a more affordable city, not ones that stifle its growth,” Whelan added.

How this fits into broader NYC policy shifts

The proposal comes as New York faces budget pressure tied to potential federal cuts and local funding gaps. At the same time, Zohran Mamdani is pushing for broader tax increases on corporations and high-income households. Together, these policies signal a more aggressive approach toward taxing wealth in New York, particularly in the real estate sector.

What this means for landlords and investors

For CRE players, this proposal is a potential headwind for luxury residential assets. Policies targeting second-home ownership could soften demand at the high end, particularly among international and part-time buyers. The bigger concern is policy direction. As New York leans further into taxation to close budget gaps, investor sentiment could shift, especially if additional measures follow. For now, the proposal is not finalized, but it adds another layer of uncertainty for owners and developers operating in the city’s luxury segment.