How the Pied-à-Terre Tax Finally Passed Albany

The setup: a bill with nine lives and no wins

By 2026 the pied-à-terre tax had been introduced, reintroduced and buried in Albany for over a decade — the full 2014–2026 history is here. It had survived as an idea because two things kept being true: New York City needed recurring revenue, and taxing absentee luxury owners polled better than taxing almost anything else. What it never had was a champion with real leverage. In 2026 it suddenly had three forces converging: a new mayor elected on it, a city budget gap that had to be closed, and a governor who preferred this tax to the alternative — raising income taxes on residents.

The mayor's opening move

Mayor Zohran Mamdani did not ease into the fight. On Tax Day 2026 his office released a video shot outside 220 Central Park South — directly beneath Ken Griffin's $238 million penthouse — announcing his push for what he called the city's first pied-à-terre tax:

"This pied-à-terre tax is specifically designed for the richest of the rich, those who store their wealth in New York City real estate, but who don't actually live here."— Mayor Zohran Mamdani, April 2026

Picking Griffin's building was not subtle, and it was not meant to be. The same purchase that had revived the bill in 2019 (that story here) was drafted back into service as the campaign's visual.

The billionaire's counter

Griffin's response escalated it into a national story. He called the video "creepy and weird," raised security concerns about the mayor filming outside his residence, and — the part that mattered — threatened to pull Citadel's planned $6 billion Midtown tower, a project expected to create some 15,000 jobs. He noted that he and his employees had "paid $2.3 billion in city and state taxes" and made "$650 million in charitable gifts" to New York institutions. The subtext was blunt: tax my empty penthouse and I'll build my next headquarters somewhere else.

It was the classic capital-flight argument that had killed the bill in 2019. This time, it didn't land the same way. The mansion tax experience of 2019–2026 had shown the luxury market absorbing new levies without collapse, and the politics of a billionaire threatening a city over a tax on second homes played, if anything, in the mayor's favor.

The governor in the middle

Governor Kathy Hochul played both sides with intent. She backed the surcharge conceptually — it closed the city's gap without touching resident income taxes, her declared red line — while publicly courting Griffin's investment, saying she would visit the Midtown project to say "thank you, and can you consider more." The choreography worked: Griffin signaled he would likely proceed with the tower while pledging to "double down" on Citadel's Miami expansion, and Hochul banked both the project and the tax.

The deal

On April 15, 2026, Hochul and Mamdani jointly announced the surcharge as shared budget policy. From there it moved with unusual speed:

• May 7, 2026 — folded into the FY 2026–27 state budget framework: a $268 billion package pairing the surcharge with $1.5 billion in additional state aid for the city. Making it budget language, not a standalone bill, denied opponents a clean up-or-down target — the same maneuver that had killed it in 2019 now carried it.
• May 27, 2026 — passed by both chambers with the budget.
• May 28, 2026 — signed by Governor Hochul. Effective July 1, 2026; sunset June 30, 2031.

The opposition's rear-guard wins

REBNY and the major brokerages lobbied hard against the steepest versions, and the final text shows their fingerprints — arguably the only reason it passed at all. The enacted law answered 2019's "unadministrable" objection by using the Department of Finance's existing assessed values for condos and co-ops in Phase 1 rather than inventing annual market appraisals; it added a five-year sunset; it exempted homes occupied by immediate family or 12-month tenants (a significant carve-out the 2019 bill lacked in this form); and it deferred the harder market-value model to 2028. Upstate, Senator Patricia Fahy's companion bill (a $2.5 million threshold for municipalities outside the city) was kept off the budget entirely.