Gov. Kathy Hochul has proposed a tax on second homes in New York City to help raise more revenue there. Now, a Capital Region lawmaker is proposing a similar tax upstate.
The proposed New York City pied-à-terre tax would apply to homes that are worth at least $5 million and aren’t primary residences. It’s still unclear how that value would be determined.
State Sen. Pat Fahy, D-Albany, said her proposal for upstate homes would allow localities to opt in to the tax, which would only apply to out-of-state owners. Fahy also said she would like to have a lower property value threshold than the New York City proposal.
The state would disburse half of the revenue raised as aid to municipalities, or AIM. The other half would stay in the locality.
“I have many … many towns and villages that really could use extra help,” Fahy said. "The AIM money has been really critical in upstate.”
She said since the COVID-19 pandemic, home values have soared in some resort areas like Lake George and parts of the Finger Lakes, with many homes sitting vacant much of the year or used as short-term rentals. A second home tax may tamp down the market some, she said.
“Many of the workers and many of the community members have really been, or their children have been priced out of the community that they grew up in,” Fahy said.
While the proposal is just an idea at this point, it’s already seeing some opposition.
“Absolutely not,” said state Sen. Pam Helming, a Republican who represents portions of the Finger Lakes.
She said the focus should be on making New York more affordable, not adding more taxes.
Others said the owners of second homes are already contributing to their communities.
"A lot of second homes pay the freight … for the school systems and for all the municipalities,” said Daniel Davies, a real estate agent in the southern Adirondack region, including Lake George. “But they really don't send school kids to the school system. ... They are paying their way, in my opinion.”
Hochul and legislative leaders are still engaged in budget talks. In a news conference on Tuesday, Majority Leader Andrea Stewart-Cousins, a Yonkers Democrat, said she would be “willing to entertain” a conversation about the upstate proposal.
“I think it's worth a broader conversation because it would be an opt-in. And … you know those senators who are talking about it really feel that there is an opportunity for revenue raisers that would help their particular municipalities,” she said.
But Stewart-Cousins also said leaders are still trying to reach an agreement on policy issues and haven’t started discussions on the financial portions of the budget, including taxes.
