Second-Home Taxes Gain Ground in NYC and Montana

June 1, 2026 - 23:04

New York City and Montana are emerging as leaders in a growing push to tax second homes, a strategy aimed at easing housing affordability crises for year-round residents. The idea is straightforward: property owners who use homes only part-time or as investments should pay a premium, generating funds that can be redirected toward affordable housing development.

In New York City, where luxury pieds-a-terre sit empty for much of the year while working families struggle with soaring rents, a new tax on high-value second residences is gaining political traction. Proponents argue these properties drive up prices without contributing to the community's daily life. The revenue could help finance new affordable units or rental assistance programs.

Montana, meanwhile, has seen explosive growth in vacation home purchases, particularly in resort towns like Bozeman and Whitefish. Local residents are being priced out of the market as out-of-state buyers snap up homes. The state is now considering a progressive tax structure on second homes, with rates increasing based on property value. The goal is to discourage speculative buying while raising money for local infrastructure and housing initiatives.

Critics warn that such taxes could hurt tourism and property values, but supporters counter that communities cannot afford to let housing stock sit vacant while teachers, nurses, and service workers cannot find places to live. Both NYC and Montana are watching each other's efforts closely, as their approaches could become models for other states and cities facing similar pressures. The debate is far from settled, but the momentum behind second-home taxes is clearly building.