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NYC Mayor Zohran Mamdani proposes a pied a terre tax on vacant luxury homes over 5 million to raise revenue, experts compare it to India’s tax on notional rent for third houses
Explainer on what is pied-a-terre tax being proposed to impose in New York City
When New York City Mayor Zohran Mamdani announced plans to impose a tax known as the “pied-à-terre” tax on vacant properties, it not only triggered a chain reaction and a heated debate on social media with pros and cons, but also raised curiosity and wonder.
There are several examples of unusual taxes across the world in history: the window tax, beard tax, salt tax, hat tax, among others.
But what exactly is this “pied-à-terre” tax?
The term “pied-à-terre” is a French phrase that literally means “foot on the ground.”
According to the proposal, New York City would impose an annual fee on luxury properties worth more than $5 million whose owners do not live in the city full-time.
It is essentially an additional tax on individuals who own a second home or another non-primary residence of high value—typically a luxury apartment worth over $5 million—often owned by ultra-high-net-worth individuals and used only occasionally, explained Ritika Nayyar, Partner at Singhania & Co., in a conversation with News18.
The municipality aims to generate an additional source of revenue through this tax. “The intention is to levy a tax on underutilised luxury properties and create another revenue stream,” she added.
Does India Have Anything Similar?
India does not have a direct equivalent of a “pied-à-terre” tax nationwide. However, there are some similar provisions.
Anil Harish, MD of D.M. Harish & Co., told News18 that Maharashtra earlier had a tax known as LRP (Larger Residential Premises tax), but it is no longer in place.
Currently, the closest equivalent in India applies when an individual owns more than two houses. In such cases, only two properties can be treated as self-occupied, on which no tax is payable.
For any additional property, even if it is vacant, the owner is required to pay tax on notional rent (also called deemed rent).
Ritika Nayyar explained that such properties are treated as “deemed let out,” and the notional rental income is taxed accordingly.
Harish added that this taxation of notional income on a third or additional house is somewhat similar to a “pied-à-terre” tax. However, it falls under the Income Tax Act and is not a property tax levied by municipal authorities.
April 18, 2026, 10:44 IST
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