New York’s Pied-à-Terre Tax Takes Effect: What NYC Property Owners and Investors Need to Know
New York’s long-discussed pied-à-terre tax is now in effect.
Enacted as part of Governor Kathy Hochul’s $268 billion State Budget, the new law imposes an annual surcharge on certain high-value, non-primary residences in New York City. Effective July 1, 2026, the tax primarily impacts condominiums, cooperatives, and one- to three-family homes that are not used as the owner’s primary residence.
Who’s Affected and Who’s Exempt?
The surcharge generally applies to qualifying secondary residences that are not regularly rented and are not occupied as the owner’s primary residence.
The law provides several exemptions, including:
- Full-time New York City residents;
- Homes occupied by the owner’s immediate family; and
- Units subject to active, full-time tenancies.
The New York City Department of Finance will notify property owners whose properties are subject to the surcharge.
Tax Rates and Rollout Phases
Phase 1: July 1, 2026 – June 30, 2028
| Property Type | Valuation Basis | Surcharge Rate |
| One- to three-family homes ($5M+) | Market value | ~0.8% – 1.3% |
| Condos & co-ops ($1M+ assessed) | Assessed value | ~4% – 6.5% |
Phase 2: July 1, 2028 – 2031
| Property Type | Valuation Basis | Threshold |
| All property types (one – to three family homes, condos & co-ops) | Market value (comparable-sales method) | $5M threshold |
The legislation is expected to affect approximately 13,000 properties throughout New York City and generate hundreds of millions of dollars in annual revenue.
Market Implications
Now that the surcharge is in effect, owners, investors, and boards should consider how it may affect:
- Luxury condominium and cooperative transactions;
- Second-home and investment acquisitions;
- Foreign and out-of-state investment in New York City residential assets;
- Long-term ownership and residency planning; and
- Building financial planning and ownership composition.
Co-op and condominium boards should also evaluate whether a significant concentration of non-primary residences within their buildings could affect future marketability or transaction activity.
What’s Next
Implementation of the new tax, and the transition to the revised valuation methodology scheduled for 2028, will remain a significant issue for New York City’s real estate market. Property owners, boards, developers, and investors should continue monitoring guidance from the Department of Finance and evaluate how the phased implementation may affect ownership structures, investment strategies, and long-term planning.
For guidance regarding the new pied-à-terre tax or other New York real estate matters, please contact Bessie Hadjigeorghi, Lisa B. Urban, or Kucker Marino Winiarsky & Bittens, LLP at 212.869.5030.
Media Contacts:
Briana Spariosu
Kucker Marino Winiarsky & Bittens, LLP
(212) 869-5030
bspariosu@kuckermarino.com