‘Taxing the Ultrawealthy’: Zohran Mamdani Backs Kathy Hochul’s Bold $5M NYC Tax Plan

Governor Kathy Hochul is pushing a new idea to help fix New York City’s budgetary woes.

Hochul is backing a new tax plan on second homes that are worth $5 million or more, to generate revenue for the city's budget deficit.

The proposal follows New York City Mayor Zohran Mamdani's requests for increased taxes on corporations and high-income earners.

In a written statement on Tuesday, April 14, Hochul said, “If you can afford a multi-million dollar second home in New York City, you can afford to join its residents in supporting the greatest city in the world.”

So far, she has not shared details regarding the implementation or timeline of the tax.

Hochul’s plan to add a tax on second homes is being considered as part of the ongoing state budget talks.

Although details remain scarce, Hochul’s plan is expected to place an annual surcharge on expensive second homes, often called pied-à-terres, that people use occasionally and not as their primary residences.

The plan is still being discussed, but the tax is expected to follow a progressive system.

This suggests that owners of higher-priced homes would pay more than those with lower-valued properties. According to the New York Times, the plan could raise around $500 million every year to help close New York City’s budget gap.

Meanwhile, the plan is backed by Mamdani, who said the tax could help reduce the gap between the rich and working-class residents.

“Thanks to the support of Governor Hochul, we are one step closer to balancing our budget by taxing the ultrawealthy and global elites with a pied-à-terre tax,” he said.

While some experts believe the new second-home tax plan may help, others express concern that it will not fully resolve New York City’s budget deficit.

Emily Eisner from the Fiscal Policy Institute reflected on the issue and said that the city still faces a large budget gap, reports Bloomberg.

The deficit is expected to be more than $5 billion in the next fiscal year.

As a result, Eisner warned that lawmakers might need to undertake additional measures, including changes to income tax and corporate tax, in order to fix the issue.

“New York lawmakers will need to look toward broad-based solutions such as the personal income tax and corporate tax,” she said.

Notably, the idea of taxing second homes is not new. In 2019, a similar plan was discussed under former Governor Andrew Cuomo, when officials wanted to use the money to support the subway system.

The proposal even gained attention after billionaire Kenneth C. Griffin bought a $238 million luxury penthouse near Central Park.

However, the plan ultimately failed because of strong opposition from the real estate industry, which warned that the move could hurt the luxury housing market by bringing in less revenue.

Hochul’s plan might also face similar industry pushback despite Mamdani's support.