Some state legislative Democrats are proposing extending Gov. Kathy Hochul’s proposing a pied-a-terre tax on second homes in New York City.

Hochul’s proposal would apply to properties that sell for more than $5 million that are not rented out full-time or listed as the owner’s primary residence. The proposal to extend the pied-a-terre tax statewide hasn’t had legislation drafted yet because discussions have informally been held as part of state budget negotiations. City & State NY reported on the discussions on Friday, and state Sen. George Borrello, R-Sunset Bay, said there is talk about lowering the threshold to $2.5 million.

“Considering how popular this is with the Democrats, yes, I think it has traction,” Borrello said.

FAHY’S PROPOSAL

A pied-a-terre tax is an annual surcharge on residential properties in New York City that are not occupied as a primary residence. The tax would ensure that those that own luxury homes, but do not live in the city or pay city income tax are still fairly contributing towards the funding of essential services like policing and parks. The tax would only apply to those homes that are not the primary residence of the owner or are not rented to a primary resident or occupied by the owner’s family. Hochul said in a news release recently that her New York City proposal is expected to generate at least $500 million a year in recurring revenue for New York City.

State Sen. Pat Fahy told City & State that plenty of upstate communities – like Saratoga Springs, Lake George and Lake Placid – have high-value second homes that owners leave vacant for most of the year, which should be subject to the tax, too. Fahy told City & State that municipalities around the state could opt into the program, and half of the money raised would be used to increase Aid and Incentives to Municipalities Aid for struggling municipalities.

“Expensive second homes are mostly unused, yet, when the owners are there, they are still using police, fire, water and infrastructure,” Fahy told City & State. “They’re still using all the services that are barely compensated for because those places are left empty most of the time. We have seen an exponential growth in luxury housing, which has priced out the residents … local residents can’t afford to live.”

HOW BIG AN IMPACT?

How big an impact Fahy’s proposal would have on local second home sales depends on what the sales threshold ends up being. The Post-Journal reported recently that 22 private residences sold for $1 million or more in 2025 — a higher number than over the past few years. In 2024, there were 13 private residences. In 2023, there were 11 private residences sold for more than $1 million and in 2022 there were only two private residences sold for more than $1 million. .

In 2025, the town of Chautauqua had the most million dollar sales with 13. Of that amount, 10 were in Chautauqua Institution. The town of Ellery had five sales, with one of them being in the village of Bemus Point. The village of Lakewood had two, while the towns of Mina and North Harmony had one sale each. The most expensive sale in 2025 was at 10 Elm Lane, Chautauqua Institution, which sold for $4.65 million. It’s described on line as a 9,500 square foot single family residence, with eight bedrooms and 14 bathrooms, on a 1.2 acre lot. It was even higher than any commercial sale last year as well.

The most expensive private residence sale in 2024 — a home in Chautauqua Institution — would have fallen about $150,000 short of meeting the proposed tax. The most expensive private residence sale in 2024 — a home in Chautauqua Institution — would have fallen about $150,000 short of meeting the proposed tax. Of the 2024 million dollar sales of private residences, the town of Chautauqua had five, including three in the Chautauqua Institution, with five in Ellery that includes one in Bemus Point, as well as sales in North Harmony, Mina and Westfield.

The impact, at least early on, of a pied-a-terre tax statewide would hit the southern part of Chautauqua County more than the northern end of the county. And, while not many sales qualify yet, the trend toward more higher value property sales over the last three years could mean that a statewide pied-a-terre tax could eventually factor into Chautauqua County’s real estate scene, depending on what sale price triggers the tax.

“There are many people, particularly in the Finger Lakes and Chautauqua Lake, that would be impacted,” Borrello said. “This will impact people who have had homes in their families for generations that are not wealthy. Many are already struggling to afford the property taxes. This could be a straw that breaks the camel’s back. I think it will have a negative impact on property values and tourism.”

A pied-a-terre tax has long been floated as a possibility in Albany. This is the first time that the proposal has expanded beyond New York City. Assemblyman Andrew Molitor, R-Westfield, expressed concerns with the proposal as well. One reason why Borrello and Molitor have concerns is the importance of summer homes to the county’s economy. Roughly one-quarter of the county’s taxable property assessments come from around the shores of Chautauqua Lake.

“New York keeps reaching its hand deeper into New Yorker’s pockets because it is on an out-of-control spending binge,” Molitor told The Post-Journal on Thursday. “Sure, taxing the wealthy is a great emotional tagline, but when the wealthy leave or find innovative tax solutions to avoid the tax, you and I end up paying more to support New York’s costly and inefficient programs. The truth is that, like high business taxes, this tax will discourage homeowners from investing in their homes and make it harder to sell homes in and around Chautauqua Lake or in many other areas around Chautauqua County. In turn the tax revenue the county generates from rising home values will fall and our property taxes will rise.”