April 16, 2026, 3:11 p.m. ET
New York City Mayor Zohran Mamdani’s “tax the rich” campaign promise is taking shape, seizing the national spotlight with a proposal to impose a new pied-à-terre tax, a rarity in the United States.
Alongside New York Gov. Kathy Hochul, Mamdani’s pied-à-terre tax plan would impose taxes on luxury second homes as a way to compel ultra-wealthy, part-time residents to contribute more to the city they benefit from, but don’t actually fully live in. Mamdani claimed victory on X, pitching the tax plan as a potential $500 million-a-year revenue stream the idea stands apart from the mansion taxes already familiar in many states including New Jersey,
How do mansion taxes differ from Mamdani’s new tax plan, and do other states have pied-à-terre? Here’s what to know.
What is pied-a-terre tax?
What does pied-à-terre mean? French for “food on the ground,” the term refers to a second home used occasionally, rather than a main home. Pied-à-terre (PAT) tax is an annual surcharge on residential properties not used as a primary residence, aimed at second homes owned by part time or non-resident owners.
Under NYC Mayor Zohran Mamdani’s tax plan, it would apply to luxury condos, co-ops, and townhouses that are kept for occasional use or investment, rather than permanent residence.
Pied-à-terre tax differs from standard property taxes, which are assessed on all owners, regardless of residency. This targets specific homes that sit vacant for much of the year or are owned by people who live and pay incomes taxes elsewhere.
How do pied-à-terre taxes differ from mansion taxes?
There is a key distinction between pied-à-terre tax and mansion taxes. Mansion taxes are typically one-time transfer taxes applied when a property is sold above a certain price threshold, often $1 million or above, regardless of how the home is used or whether it’s a primary residence, according to SmartAsset. By contrast, pied-à-terre are annual taxes tied to use and occupancy status — not to a transaction.
In practical terms: A homeowner could pay a mansion tax once when buying or selling an expensive home but would pay a pied-à-terre tax every year the property remains a non-primary residence.
Do any states have pied-à-terre taxes?
No U.S. state currently has a broad, statewide pied-à-terre tax comparable to New York City’s proposal, meaning Mamdani’s tax-the-rich plan is one of the first examples of the policy in the United States. It has been pitched in other states for over a decade but has continuously hit legal roadblocks.
In fact, NYC floated the idea in 2019, but it failed under the weight of opposition from real estate interests and even the union representing doormen.
Some cities have adopted vacancy taxes or higher tax classifications for non-owner-occupied homes, but those measures are narrower and usually for home that are completely empty.
What is mansion tax?
Mansion tax is a type of real estate transfer tax for high-value properties that some states and cities enforce on buyers as part of their closing costs. It can be somewhat deceiving since the tax refers to the price point of the property and not the square footage, so technically, mansions aren’t the only properties taxes.
What states have mansion taxes?
Seven states and Washington DC have some form of mansion or luxury transfer tax on high-value home sales. Those states are New Jersey, Connecticut, New York, Rhode Island, Vermont, Washington, and Hawaii. Rhode Island’s levy on second homes is dubbed the “Taylor Swift Tax” because of the pop star’s Watch Hill beach house she purchased in 2013 for $17.75 million.
Mansion taxes vary state-by-state; for example, in New Jersey, you can expect to pay a mansion tax of 1% on properties worth over $1 million. Washington DC imposes a mansion tax of $1 per $100 of assessed value of residential properties priced at or above $2.5 million.
Why annual second-home taxes are rare in the U.S.
Most states tax second homes indirectly, and not through a standalone “second-home tax.” In the US, second homes are taxed, mostly through standard property taxes (almost every second home in the US pays regular, local property taxes). And what most people often call “second-home taxes” are actually mansion taxes, though they don’t legally target second homes. States generally prefer taxes that are sales-based levies.
What Mamdani’s ‘tax the rich’ proposal would do
Under the proposal, NYC would impose an annual surcharge on residential properties valued at $5 million or more when the owner’s primary residence is outside the city. State officials estimate the tax would apply to roughly 13,000 luxury units and raise at least $500 million annually to help close the city’s budget gap.
Did the NYC tax proposal pass?
Not yet. NYC’s pied-à-terre tax must still be approved as part of the state budget. Under that scenario, the tax proposal would not be considered a stand-alone bill and would largely be hashed out in closed-door discussion between the governor and leaders of the Senate and Assembly. That may make it difficult for opponents, including the Real Estate Board of New York, a powerful industry group, to lobby effectively against the proposal, the New York Times reported.
Lori Comstock is a New Jersey-based news reporter covering trending news with USA TODAY Network’s Mid-Atlantic Connect Team. She covers news in the Northeast, including New Jersey, Pennsylvania, Delaware, Washington DC, Maryland, and Virginia. Reach her at LComstock@usatodayco.com.
