New York Gov. Kathy Hochul flips position on increased taxation, pushing for NYC pied-à-terre tax to close spending deficit
NEW YORK, New York (WABC) — Governor Kathy Hochul is partially reversing course and has decided to support a yearly tax surcharge aimed at New York City’s richest as legislators strain to close the city’s multi-billion budget gap, left in the wake of the Adams administration.
The state budget was due back on April 1, but has yet to pass as negotiations continue in Albany, increasing pressure on lawmakers to reach an accord.
New York City’s budget deficit is a serious point of contention.
Mayor Zohran Mamdani vocally advocates for increased taxes on the city’s wealthiest individuals and corporations, emphasizing that the proposed tax is one of the only ways to erase the enormous deficit he inherited.
Mamdani previously said City Hall will scrutinize city agencies and their spending, but he insists that spending cuts will not be enough.
“I will be blunt. New York City is facing a serious fiscal crisis,” Mamdani said earlier in the year; “that also means raising taxes on the wealthiest New Yorkers and those profitable corporations, and it means recalibrating the relationship with the state.”
Both chambers of the New York State Legislature agreed on increasing taxes on the wealthiest New Yorkers and corporations, which Gov. Kathy Hochul initially said she would not support.
Hochul released a new statement, saying in part that city residents “should not be left carrying the burden alone. 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.”
She believes that the so-called pied-à-terre tax will target many of the city’s looming high-rise developments, many owned by foreign investors who spend little to no time in the apartments.
They pay relatively low taxes compared to full-time city residents.
The proposed tax would be on second homes priced at more than $5 million within New York City.
The tax is expected to affect roughly 13,000 homes and potentially involve a sliding scale, bumping up for homes valued at $15 million and again at $25 million.
Real estate groups largely oppose the tax.
“This annual tax will weaken the city’s broader economy. It will not raise the amount of revenue expected, but will eliminate thousands of construction jobs, lower property values, and raise costs for New Yorkers,” said Jim Whelan, president of the Real Estate Board of New York, a trade association and lobbying group.
While exact details of the tax haven’t yet been revealed, lawmakers hope it will help raise $500 million dollars annually for New York City.
Mayor Mamdani shared his reaction, thanking Hochul for her support and saying, “we are one step closer to balancing our budget by taxing the ultra-wealthy and global elites with a pied-à-terre tax — the first of its kind in our state. Alongside the governor, our administration is fighting every day to make sure we address this fiscal deficit fairly, where the wealthy contribute what they owe and our budget reflects our commitment to the working New Yorkers being priced out of our city.”
Working Families Party called Hochul’s support “an important first step in the right direction,” but pressed for more to be done.
———-
* Get Eyewitness News Delivered
* Download our connected TV app
* More local news
* Send us a news tip
* Download the abc7NY app for breaking news alerts on the go
Submit a tip or story idea to Eyewitness News
Have a breaking news tip or an idea for a story we should cover? Send it to Eyewitness News using the form below. If attaching a video or photo, terms of use apply.
Copyright © 2026 WABC-TV. All Rights Reserved.
