NYC Mayor Zohran Mamdani introduces pied-à-terre tax on luxury secondary homes valued at over $5M: What does it mean?

Zohran Mamdani said the measure is targeted at luxury secondary homes in New York City valued at $5 million or more that are not owner-occupied

Zohran Kwame Mamdani announced on April 15 via video that his administration plans to introduce a pied-à-terre tax aimed at wealthy Americans who own luxury secondary homes in New York City.

Taking to Instagram, Zohran Mamdani said, “Well, today we're taxing. I'm thrilled to announce we've secured a pied-a-tierre tax, the first in New York's history. This is an annual fee on luxury properties worth more than $5 million whose owners do not live full time in the city."

New York City Mayor Zohran Mamdani has introduced a pied-a-terre tax targeting luxury secondary residence worth over $5 million. (AP Photo/Seth Wenig) (AP)

“The pied-a-terre tax is specifically designed for the richest of the rich. Those who store their wealth in New York City real estate but who do not actually live there. But even so they are able to reap the huge financial rewards of owning property there,” he said.

“And most of the time these units are sitting empty,” he said, adding that the tax will raise at least $500 million directly for the city. “It’ll help fund things like free child care, cleaner streets and safer neighbourhoods,” he said.

What is a pied-à-terre tax?

Literally translated from French, pied-à-terre means ‘foot on the ground.’ It refers to a small, secondary home, typically an apartment or condominium in a city, that is not used as a primary residence.

According to a USA Today report, the proposed pied-à-terre tax would not apply to wealthy homeowners who maintain a primary residence in New York City. Zohran Mamdani’s office said the measure is aimed at “out-of-city residents and global elites” who use the city’s high-value real estate market as a store of wealth rather than as homes.

During his election campaign, Mamdani had pledged to impose a 2% tax on the wealthiest 1% of New Yorkers earning over $1 million annually. After taking office on January 1, 2026, he reiterated plans to tax millionaires through a pied-à-terre levy. The proposal, expected to be part of ongoing state budget negotiations, would introduce an annual surcharge on these multi-million-dollar secondary homes.

Besides slashing rising housing costs in the city, these taxes will raise funds that will be invested in developmental infrastructure projects, universal free early childcare services, free bus rides for the public, cleaner streets and safer neighbourhoods.

New York State Governor Kathy Hochul, who earlier resisted Mamdani's idea, was quoted by AP as saying she will push to create a new tax on multimillion-dollar second homes in New York City.

"As governor, I understand the importance of stabilising the city's finances without compromising on essential services New Yorkers count on," Hochul said in a statement. "If you can afford a USD 5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker," she was quoted as saying by AP.

AP quoted the governor's office as saying she would include the measure in this year's state budget, a sprawling bundle of bills still being hotly negotiated in Albany after the governor and Legislature blew past an April 1 due date for the spending plan.