Mayor Zohran Mamdani and Governor Kathy Hochul announced a proposal to create New York State’s first pied-à-terre tax, a measure aimed at raising revenue by taxing high-value secondary properties owned by people whose primary residence is outside New York City.

According to the announcement, the tax would apply to one- to three-family homes, condominiums, and co-ops valued above $5 million when the owner’s main home is located outside the city. City and state leaders say the measure is designed to target ultrawealthy individuals who keep luxury New York properties as secondary residences or investment assets rather than as full-time homes.

The administration says the new tax could generate about $500 million a year, money that would help address New York City’s budget gap while protecting public services. Officials also noted that similar proposals had been discussed for years under previous administrations, but this would be the first time such a tax is actually enacted in New York State.

In a video posted on X, Mamdani tied the announcement directly to one of the core promises of his campaign. “When I ran for mayor, I said I was going to tax the rich. Well, today, we’re taxing the rich,” he said. He described the measure as targeting the “richest of the rich,” specifically people who “store their wealth in New York City real estate but who don’t actually live here.”

Mamdani also said the revenue would help fund initiatives such as free childcare, cleaner streets, and safer neighborhoods. Framing the issue as one of fairness, he said everyone has a role to play in contributing to the city, “and some a little bit more than others.” He also called the current structure “a fundamentally unfair system that hurts working New Yorkers” and said, “Now, it’s coming to an end.”

In a statement, Mamdani said the measure would help balance the budget in a fairer way by requiring wealthy property owners to contribute more, rather than placing the burden on working New Yorkers. Hochul also defended the proposal, saying that owners of multimillion-dollar second homes should contribute more to the city they benefit from.

The announcement is politically notable because it reflects themes Mamdani emphasized during his rise in city politics. Running as a democratic socialist, he has consistently argued that New York should ask more of the wealthy in order to fund public services and ease pressure on ordinary residents facing the city’s high cost of living.

If approved, the pied-à-terre tax would mark a significant shift in how New York taxes luxury real estate tied to out-of-city and global wealth.