ALBANY, N.Y. – Senator Patricia Fahy (D—Albany) announced today she is introducing legislation to establish an ‘opt-in’ pied-à-terre tax for municipalities outside New York City on investor properties and luxury second homes over $5 million in value, as discussions surrounding it in the FY2026-27 New York State final budget continue.

The tax would apply to residential homes that meet the following requirements: 
 

• Is not the owner’s primary residence or a family member’s
• Is not rented out as someone else’s primary residence 
• Has a 5-year average value of $5 million
   

The owner must have their primary residence outside the municipality where the property is located. Municipalities would be able to impose an annual tax between 0.5% and 4% of the property’s average value, including graduated rates if desired. 

Revenue would be split between localities and the State’s Aid and Incentives to Municipalities (AIM) funding. Fifty percent would stay with the municipality, and fifty percent would go to AIM, supporting local governments specifically outside of New York City.

“Across New York State, from the Capital Region to the Hudson Valley and the Adirondacks, we are seeing a exponential increase in luxury investor properties and second homes on steroids, many of which sit vacant for much of the year while driving up costs for full-time residents,” said Senator Patricia Fahy. “Cities, towns, and villages outside of New York City have seen AIM funding remain largely unchanged in the last decade or more, even as local governments face rising costs and an exodus of young people and families who have been priced out of the communities they grew up in. For too long, these properties have contributed to a hollowing out of communities Upstate, in Long Island, the Adirondacks, Finger Lakes, and across New York State, in some instances, by turning them into part-time ghost towns.”

This year, Governor Hochul and New York City Mayor Zohran Mamdani announced a plan to establish a pied-a-terre tax on ultra-luxury investor properties and second homes in New York City. By targeting properties valued at over $5 million dollars, the City is projected to generate $500 million dollars annually. An outside NYC approach would potentially bring in millions of dollars in badly needed funding for local communities across the Empire State. 

In parts of the Adirondack, a vacancy study found that almost 20% of all homes are unoccupied. In some places, seasonal homes now outpace year-round occupancy. Secondary homes benefit from and require the use of local infrastructure, public safety, and other municipal services; supported by local taxes that secondary resident homeowners can avoid.

This is a balanced, pragmatic approach: one that asks more from those with the greatest capacity to contribute; while protecting ordinary New Yorkers and strengthening the communities they call home.

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