Governor Kathy Hochul unveiled a proposal to levy a pied‑à‑terre surcharge on New York City residences valued at $5 million or more. The annual tax targets non‑primary homes owned by out‑of‑state buyers, state residents with second units and investor‑held properties that sit vacant. Officials hope the measure will plug a projected $5.4 billion city budget gap.

Earlier attempts fizzled after hedge‑fund billionaire Kenneth C. Griffin bought a $238 million Central Park South condo in 2019, prompting a real‑estate lobby backlash. With Mayor Zohran Mamdani’s pro‑affordability agenda and a tightening fiscal timeline, the political climate has shifted enough for the governor’s plan to gain backing from the City Council speaker and several state legislators.

Administration officials project the surcharge will generate at least $500 million annually, citing a rough estimate of 13,000 qualifying units. Critics argue the figure is optimistic; a 2020 analysis of a similar 2019 proposal capped revenue at $232 million. Moreover, wealthy owners can shield assets through LLCs or trusts, complicating enforcement.

Real‑estate lobby REBNY warns the tax could depress demand, prompting buyers to shift to lower‑tax states and slowing construction at a time when housing supply is already tight. Nonetheless, with the city’s July 1 budget deadline looming, lawmakers are poised to vote, making the surcharge the next flashpoint in New York’s fiscal showdown.