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A proposal by New York Governor Kathy Hochul to tax second homes valued above USD 5 million has received support from New York Mayor Zohran Mamdani. The move targets high-value properties that remain vacant for most of the year and is aimed at improving housing affordability and bridging a budget gap. The policy is expected to generate around USD 500 million annually. Similar measures are already in place in countries such as France, the United Kingdom and Canada.
New York Governor Kathy Hochul has proposed a new tax on second homes valued above USD 5 million, a move that has been supported by New York Mayor Zohran Mamdani. The proposal focuses on high-value residential properties that are not used as primary homes and often remain unoccupied for much of the year. Advertisement
The development marks a notable shift, as Mamdani, known for advocating higher taxes on wealthy individuals to improve affordability, had earlier faced resistance from Hochul on similar measures. The governor is preparing for a re-election bid and had previously avoided tax increases. However, in this case, she indicated that individuals who can afford expensive second homes should contribute more toward the city's finances, aligning partially with Mamdani's stance.
A statement from the mayor's office highlighted examples of high-value property ownership, including Ken Griffin, founder and CEO of Citadel, who had purchased a USD 238 million penthouse overlooking Manhattan's Central Park in a record-setting residential deal in the United States at the time. Griffin had earlier criticised Mamdani's policy direction following his election, stating that the city required more effective governance.
The proposed measure is expected to generate approximately USD 500 million annually, which could help address New York City's budget gap. While the exact surcharge rate has not yet been specified, the policy is designed to target ultra-wealthy individuals, including out-of-city residents and international investors who use real estate primarily as a store of wealth rather than as active residences.
Globally, similar taxation frameworks already exist in countries such as France, United Kingdom and Canada, where non-primary residences are subject to additional taxes to manage housing availability and speculative investment. In New York, the proposal comes amid ongoing concerns about housing affordability, limited supply and rising property prices, particularly in prime urban locations.
Source Reuters
5th Jun, 2025
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