Dive Brief:
- New York Gov. Kathy Hochul is proposing a new tax on second homes in New York City owned by non-residents and worth $5 million or more.
- The levy would impact an estimated 13,000 properties, Gothamist reported. It is expected to generate $500 million annually for the city, Hochul said in a press release.
- Following Hochul’s announcement, New York State Sen. Patricia Fahy proposed implementing a version of the tax statewide.
Dive Insight:
The U.S. continues to face a dearth of affordable housing options, and several states are exploring surcharges on high-end second properties, also known as a pied-à-terre tax.
Montana this year imposed a flat 1.9% tax on second homes, short-term rentals and vacant residential lots, a levy lawmakers expect will help lower taxes on year-round primary resident housing and year-round renters.
Rhode Island on July 1 will implement a tax on properties valued at more than $1 million that are not primary residences for the owners.
Upstate New York is seeing a “rapid increase” in such properties, which are often vacant and can drive up housing costs for full-time residents, Fahy said.
“That imbalance is increasingly felt in smaller communities, where even modest shifts in housing supply and municipal budgets can have outsized consequences,” Fahy said in a news release.
