New York City’s Pied-à-Terre Tax: What Property Owners Need to Know
Published: 8/17/2026
If you own a high-end apartment, condo, co-op, or home in New York City that isn’t your primary residence, there’s a new annual tax you need to know about. Signed into law by Governor Kathy Hochul as part of the state’s Fiscal Year 2027 Budget, the pied-à-terre (French phrase meaning “foot on the ground”) tax took effect on July 1, 2026, and is projected to generate approximately $500 million annually from roughly 11,000 properties.
What Is the Pied-à-Terre Tax?
The new law imposes an annual surcharge on high-end residential properties in New York City that do not serve as the owner’s primary residence. Unlike traditional property taxes that apply uniformly based on assessed value, this tax specifically targets second homes, vacation apartments, and occasional-use residences owned by non-residents or those who live primarily elsewhere. The surcharge is imposed on top of existing real property taxes and ranges from 0.80% to 6.5% of the NYC Department of Finance (DOF) market value depending on property type.
Who Does It Apply To?
The tax covers the following “covered properties”:
- One- to three-family homes valued at $5 million or more.
- Condominium units valued at $1 million or more.
- Cooperative (co-op) units valued at $1 million or more.
Importantly, the law includes “look-through” provisions that attribute ownership to individuals even when property is held through trusts, LLCs, partnerships, corporations, or other entities. A “covered owner” includes majority owners of entities that hold such properties, as well as certain trust beneficiaries.
Tax Rates: A Two-Phase Approach
Phase 1 (July 1, 2026 – June 30, 2028):
| Property Type | Value | Rate |
| One- to three-family homes | $5M–$15M | 0.80% |
| One- to three-family homes | $15M–$25M | 1.05% |
| One- to three-family homes | Over $25M | 1.30% |
| Condos and co-ops | $1M–$3M | 4.00% |
| Condos and co-ops | $3M–$5M | 5.25% |
| Condos and co-ops | Over $5M | 6.50% |
The higher rates for condos and co-ops reflect the fact that current DOF valuations historically produce assessed values substantially below actual market prices.
Phase 2 (July 1, 2028 – June 30, 2031): All property types will shift to a uniform valuation methodology based on comparable sales, and the same $5 million threshold and graduated rates (0.80%–1.30%) will apply across the board.
Key Exemptions
A property is exempt from the tax if any of the following apply:
- The owner occupies it for a majority of days in a calendar year;
- An immediate family member (spouse, child, parent, sibling, grandparent, or grandchild) resides there; or
- A qualifying tenant occupies it under a bona fide lease of at least one year.
The DOF will primarily look at the address listed on an owner’s state or federal income tax return to determine primary residence status, along with additional indicators of occupancy.
What Property Owners Should Do Now
The DOF will notify owners of subject properties by August 30, 2026, and owners will have 30 days to contest their determinations. Property owners should:
- Review primary residence documentation and ensure tax returns reflect the correct address;
- Assess ownership structures involving trusts, LLCs, or other entities for look-through exposure;
- Evaluate existing leases to determine whether a tenant exemption applies; and
- Understand the appeal process, including acceptable forms of proof such as driver’s licenses, voter registration, or other DOF-approved documentation.
Co-op boards face additional burdens: the DOF will add the surcharge directly to a co-op’s property tax bill, and boards must collect it from the relevant tenant-shareholders. Delinquencies could result in a lien on the entire building.
The Bottom Line
The pied-à-terre tax represents a significant shift in the cost calculus for non-residents or those who live primarily elsewhere owning real estate in New York City. It is specifically designed to capture revenue from affluent non-residents who use city infrastructure without paying local income tax. With enforcement mechanisms still being finalized—and penalties of up to 50% of the applicable surcharge for misleading documentation—owners of high-end NYC properties should consult with tax and real estate counsel sooner rather than later. The time to assess your exposure is now, not after the notice arrives in August.
Daniel J. Pollak
Member
Real Estate Tax Appeals, Real Estate
973.403.3119 · 973.618.5519 Fax
dpollak@bracheichler.com
Michael A. Rienzi
Counsel
Litigation, Real Estate, Real Estate Tax Appeals
973.364.5226 · 973.618.5961 Fax
mrienzi@bracheichler.comMore Real Estate Tax Appeals…
Related Practices: Real Estate Tax Appeals
Related Attorney: Daniel J. Pollak, Michael A. Rienzi
Related Industry: Real Estate
