A Tax Twelve Years in the Making

2014: A policy paper and a bill nobody expected to pass

The idea of taxing New York's absentee luxury owners entered mainstream debate in 2014, when the Fiscal Policy Institute proposed a graduated annual surcharge on high-value homes whose owners lived elsewhere. The context was the first supertall boom on 57th Street: One57 had just set city price records, and reporting at the time found that in swaths of Midtown's new towers, a majority of units were owned by shell companies or out-of-towners who were rarely, if ever, in residence.

State Senator Brad Hoylman — whose district covered many of those very towers — introduced the first pied-à-terre tax bill that year. The argument was simple: absentee owners consume city services, enjoy the appreciation that New York's economy generates, and pay comparatively little for the privilege, since New York has no residency-based property tax differential and non-residents pay no city income tax. The bill went nowhere. Real estate was — and remains — Albany's most formidable lobby.

January 23, 2019: the $238 million match strikes

For five years the bill sat in committee. Then hedge-fund founder Ken Griffin closed on the penthouse of 220 Central Park South for $239,958,219 — the most expensive home ever sold in the United States — reportedly to use "as a place to stay when he's in town." A record-shattering purchase, by a Florida resident, of a part-time perch above Central Park, at the exact moment the subway was in crisis: the symbolism wrote itself.

"Billionaire oligarchs who own $238 million second homes can afford to pay a little more to sustain our subways, our schools and our city."— State Sen. Brad Hoylman, February 2019

Within weeks the dormant bill was front-page news. The 2019 version proposed a sliding annual surcharge on second homes worth $5 million or more, from 0.5% up to 4% on value above $25 million. Analysts estimated Griffin's penthouse alone would have owed roughly $8.9 million a year. Mayor de Blasio endorsed the concept; for a few weeks in March 2019 it looked certain to ride the state budget into law. We tell the full story of that apartment — and its strange 2026 sequel — in The $238 Million Apartment That Started It All.

April 2019: the great pivot to the mansion tax

Then it fell apart, in a way that would define the debate for seven years. The real estate industry argued the tax was unadministrable — how do you value a one-of-a-kind penthouse every year? how do you audit "primary residence"? — and warned it would chill the luxury market that feeds the city's transfer-tax revenue. Albany blinked, but it wanted the money. In the final April 2019 budget, legislators swapped the recurring pied-à-terre tax for something easier to collect: a progressive mansion tax reaching 3.9% on $25M+ sales and a supplemental transfer tax on sales above $3 million — one-time levies paid at closing, collected through existing machinery.

The pied-à-terre tax was dead again. But the swap mattered: Albany had established that taxing high-end New York real estate was politically safe. The luxury market absorbed the mansion tax and kept trading. The "sky is falling" argument lost some of its force. For how the 2019 near-miss shaped what actually passed, see 2019 vs. 2026: How the Final Law Differs.

2020–2025: reintroduced every session, dead every session

Hoylman (later Hoylman-Sigal) reintroduced the bill in essentially every legislative session that followed. It gained co-sponsors during the pandemic budget crunch of 2020–21, when the city faced double-digit deficits and "tax the second homes" polled well. Each year it met the same coalition of opposition — REBNY, the brokerage community, co-op boards worried about valuation chaos — and each year the budget found easier money elsewhere. By 2024 the bill was a fixture of Albany's perennial-ideas pile, alongside congestion-pricing carve-outs and good-cause eviction.

Two slow-moving forces kept it alive. First, the city's structural budget gap widened as pandemic-era federal aid expired. Second, the politics of housing in New York moved sharply left, putting absentee luxury ownership — an estimated tens of thousands of units functioning as safe-deposit boxes in the sky — at the center of the affordability argument.

November 2025: the variable that changed — City Hall

The decisive break came not in Albany but in the 2025 mayoral race. Zohran Mamdani campaigned explicitly on taxing "the richest of the rich, those who store their wealth in New York City real estate, but who don't actually live here" — and won. Where de Blasio had endorsed the 2019 push tepidly, Mamdani made the pied-à-terre tax a signature demand, staging a Tax Day video outside Griffin's own penthouse. Griffin called the video "creepy and weird" and threatened to pull a planned $6 billion Midtown tower — a fight that dominated the tabloids and, paradoxically, kept the tax on the front page through budget season. The blow-by-blow is in How the Pied-à-Terre Tax Finally Passed Albany.

April–May 2026: the budget deal

On April 15, 2026, Governor Hochul and Mayor Mamdani jointly announced a pied-à-terre surcharge as their preferred tool to close the city's budget gap "without raising income tax on residents." On May 7 it was folded into the FY 2026–27 state budget agreement — a $268 billion package that paired the surcharge with $1.5 billion in additional state aid for the city. The Legislature passed the budget language on May 27, 2026; Governor Hochul signed it on May 28. The surcharge took effect July 1, 2026, with a sunset of June 30, 2031.

The enacted version answered the old "unadministrable" objection with a two-phase design: condos and co-ops are initially taxed on their existing Department of Finance assessed values (4%–6.5% above $1 million assessed), moving to a DOF market-value model in 2028, while 1–3 family homes use a five-year average market value (0.8%–1.3% above $5 million). The City Comptroller projects roughly $500 million a year from about 11,200 properties.