State and local governments across the U.S. are seizing on a juicy new target for plugging budget holes and easing housing shortages: second homeowners.
New York City is planning to tax pieds-à-terre worth $5 million or more. Rhode Island’s “Taylor Swift tax” will hit homes valued at over $1 million that are uninhabited for at least 183 days of the year. Nicknamed after the pop star who owns a waterfront mansion in Westerly, R.I., the measure is set to take effect in July.
Meanwhile, courts are weighing proposals in Montana and San Francisco for extra levies on vacant homes.
These taxes are generating furious debate. Supporters say they would help improve housing affordability by encouraging owners of second homes to turn them into long-term rentals rather than let them sit vacant.
“Homes should be for people to live in, not to sit empty, especially during a crisis,” said Sean Elo-Rivera, a city council member in San Diego, where residents will vote on whether to tax second homes.
Elo-Rivera introduced the city’s proposal, subject to a June ballot measure, to place a levy of $8,000 on vacant properties next year. The tax would rise to $10,000 in 2028.