The New York State legislature has approved Gov. Kathy Hochul’s proposal to enact a new tax on second homes in New York City valued at $5 million or more.
The Wall Street Journal reports the so-called “pied-à-terre tax” is part of the state’s budget legislation and will go into effect on July 1. Hochul claimed the new tax could generate as much as $500 million per year for the cash-strapped city, which is operating on a $5.4 billion deficit.
The city’s Department of Finance will determine if a residence is a second home and would then calculate its market value. Hochul estimated that 10,000 homes belonging to non-residents of the city would be subject to the tax.
The tax became the subject of controversy when New York City Mayor Zohran Mamdani recorded an online video that singled out hedge fund executive Ken Griffin’s penthouse property as an example of the tax’s target. Griffin paid a record-breaking 2019 for the penthouse in 2019 and could owe $1 million or more with the new tax.
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