Gov. Kathy Hochul was dragged by critics for her sudden pied-à-terre tax push — including for backtracking on her no new taxes pledge — as Mayor Zohran Mamdani and his lefty allies cheerfully took credit Wednesday.
Hochul — who for months has been hounded by chants of “tax the rich” from Mamdani’s Democratic Socialists of America comrades — said she now wants to slap a levy on multi-million dollar secondary homes in the city.
“Kathy Hochul’s ‘No Tax Hike’ promise has expired faster than the families fleeing New York’s affordability crisis,” said Nassau County Executive Bruce Blakeman, the Republican candidate facing off against Hochul as she seeks re-election this year.
Stephen Yang for NY Post
The Democratic governor’s apparent attempt at appeasement involves taxing about 13,000 secondary residences worth at least $5 million in the Big Apple — a pitch that was forcefully condemned by real estate industry bigwigs.
“This proposal overpromises revenue while ignoring the real economic damage it would cause,” warned James Whelan, president of the powerful Real Estate Board of New York.
“A tax like this cannot be adopted without causing significant economic harm to everyday New York City residents,” he said in a statement Wednesday.
The governor’s office hopes the new surcharge — which has long been a goal of the Dem-controlled state Legislature — will drum up at least $500 million in revenue a year that would go toward filling the city’s so-called $5.4 billion budget deficit.
Mamdani and the city’s DSA chapter has been beating the drum for Hochul and the state Legislature to greenlight an income tax hike on New Yorkers making $1 million or more — while also pitching a corporate tax increase — in order to fill the budget gap.
City Hall has proposed a whopping $23 billion combined in taxes since Mamdani took office on Jan. 1. But Hochul was the one to offer the relative pied-à-terre peanuts, in an apparent bid to help him save face with his base, with the plan coming together over the last few weeks, according to sources.
But it didn’t stop Mamdani and his lefty pals from patting themselves on the back.
“When I ran for mayor, I said I was gonna tax the rich. Well, today, we’re taxing it,” Hizzoner boasted in a slickly produced video he released several hours after Hochul’s announcement.
“I’m thrilled to announce we’ve secured a pied‑à‑terre tax,” he continued in the clip, filmed outside billionaire investor Ken Griffin’s $238 million Manhattan penthouse.
He did not mention Hochul in the clip, though he thanked her in a statement included in the governor’s press release.
“Thanks to the support of Governor Hochul, 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,” he said.
Hochul had repeatedly claimed she would not raise taxes even as Mamdani and other far-left pols have demanded the wealthiest New Yorkers and corporations fork over more.
“I don’t believe in raising taxes for the sake of raising taxes,” she said on Jan. 16 in a Fox 5 interview.
“And what is served by that? We have high taxes already predating my time. We have enough revenues to do what we want to do and what we need to do to support our state. So beyond that, I don’t see a justification.”
She reiterated that point during a Politico forum on March 11, claiming she wanted to “make sure we are smart about having a system in place where it’s not just taxing for the sake of taxing.”
Republicans slammed her over the glaring flip-flop, especially after she implored wealthy New Yorkers at that same forum to encourage their rich pals who fled the city to come back and keep padding government coffers.
“Speaking out of one side of her mouth, Hochul tells those who fled New York to come back but out of the other side, she’s plotting ways to tax New Yorkers even more,” Rep. Nicole Malliotakis (R-NY) said in a statement.
State Assemblyman Michael Tannousis compared it to Hochul’s reversal on implementing congestion pricing — when she paused the new fee on motorists driving into the heart of Manhattan until after the 2024 election.
“She promises one thing and does another,” said the GOP pol, who represents parts of Staten Island and Brooklyn.
“This is a glimpse of what New York residents face if Hochul is re-elected. Don’t be fooled.”
Staten Island Borough President Vito Fossella added: “This latest money grab will repeat the same pattern that has driven residents, businesses and investment out of New York for years. Targeting and punishing wealth does not fix the problem. However, reducing runaway spending, and providing incentives that expand the tax base, do.”
The pied-à-terre tax has been floated in the Legislature since at least 2019, but the specifics of Hochul’s proposal still need to be hashed out in the ongoing state budget negotiations.
The governor’s office did not provide details on exact planned rates but sources said it would likely involve a scale based on property sale values, increasing for homes worth $15 million and once more for pads worth at least $25 million.
Homes listed as vacant or vacation would be targeted while those labeled as rental units or owner-occupied would not be affected, according to Hochul’s office.
Currently, a 4,000-square-foot Chelsea condo on the market for $5 million already has a property tax bill of $84,000 annually, according to property records.
A 2,600 square-foot condo in Midtown being sold for $5 million has a tax bill of $42,000.
“This is a punitive tax for a beneficial outcome,” one real estate insider said.
“Pied-à-terres pay property taxes, employs people and use very few city services. We are lucky we have them; we shouldn’t discourage them.”
Another industry source argued the tax “will bring a halt to tens of billions of dollars in new construction, spending and tax revenue over the next decade.”
Big spending from pied-à-terre owners would also dry up, “hurting retail, theater, and cultural institutions,” the source warned.
Insiders also noted the relatively minor amount of revenue the surcharge would net — as sources insisted it was the last handout Hochul planned to deliver to help the new mayor. She also agreed to give the city $1.5 billion in February to help with the purported deficit.
“As Governor, I understand the importance of stabilizing the city’s finances without compromising on essential services New Yorkers count on,” she said in a statement. “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.”
Hochul also defended her pitch – and claimed she was not entertaining raising income taxes or corporate taxes this year in her budget that is now more than two weeks late.
