After promising to deliver millions of dollars to help balance Mayor Zohran Mamdani\u2019s city budget, Gov. Kathy Hochul on Thursday released details of her new second-home tax that could apply to 10,000 properties in New York City, quickly drawing the ire of the real estate industry.<\/p>\n
The plan also assumes that the city and state governments will amend the city\u2019s property tax system<\/a>.<\/p>\n What You Need To Know<\/b><\/p>\n <\/p>\n <\/p>\n It\u2019s a big part of both the governor’s and mayor\u2019s still unfinished budgets<\/a>.<\/p>\n According to details of the proposal obtained by NY1, the new tax structure applies to one to three family homes, condos and co-ops owned by people who don\u2019t call New York City home full time.<\/p>\n The second home tax, or pied-\u00e0-terre tax, would cover homes worth over $5 million and taxed at their assessed market value.<\/p>\n The tax rate would then increase depending on assessment: properties assessed at $5 million to $15 million would face a 0.8% surcharge, those assessed at $15 million to $25 million \u2014 a 1.05% surcharge and those over $25 million at 1.3%.<\/p>\n The plan still needs approval from both chambers of the state legislature and Hochul\u2019s signature in the final budget package. Representatives for both state Sen. Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie told NY1 they are still reviewing the proposal.<\/p>\n In a statement, Hochul\u2019s office called the move a \u201ccommon-sense approach to support New York City and protect the services millions of families rely on.\u201d<\/p>\n \u201cWe\u2019re asking some of the wealthiest people in the world to contribute a bit more to generate targeted revenue while avoiding unintended consequences for New York\u2019s tax base,\u201d said Hochul spokeswoman Jennifer Goodman.<\/p>\n Hochul\u2019s office offered one example for a single-family home assessed at over $11,500,000 would pay over $92,000 annually under the new structure.<\/p>\n Previously, Hochul said the tax would apply to 13,000 homes across the city, but on Thursday her office revised that estimate to between eight and 10,000 properties. The real estate industry slammed the blueprint and argued it could freeze buying habits.<\/p>\n \u201cWhen you buy a second home, you pay property taxes; when you come to the city, you go out to restaurants, you go out to theaters, you pay for goods that generate sales tax. This all comes back to the benefit of the city [and] state,\u201d said Real Estate Board of New York President James Whelan in an interview.<\/p>\n But the plan also expects state lawmakers to tackle a new issue: changing the city\u2019s antiquated property tax system dating back to the 1980s.<\/p>\n\n