Effective July 1, 2026: The New York State Legislature has enacted a new annual Pied-à-Terre Tax Surcharge on certain high-value New York City residential properties that are not used as the owner’s primary residence. The surcharge becomes effective for NYC tax years beginning July 1, 2026.
The new law applies to qualifying condominiums, cooperative apartments, and certain one- to three-family residences located within New York City that serve as secondary homes rather than primary residences. The surcharge is imposed in addition to existing New York City property taxes and is expected to impact luxury second-home owners, including many non-resident purchasers. During the initial phase in period, the surcharge generally applies to certain non-primary residence condominiums and cooperative units valued at approximately $1 million or more and certain non-primary residence single-family homes valued at approximately $5 million or more.
State officials estimate the surcharge will generate approximately $500 million annually for New York City. During the initial implementation period, certain high-value condos and co-ops may be subject to surcharge rates ranging from 4% to 6.5% based on assessed value, while qualifying one- to three-family homes valued above specified thresholds will also be subject to additional charges. The New York City Department of Finance will determine eligibility and administer the surcharge.
For real estate professionals, attorneys, lenders, and purchasers, the new surcharge introduces an important consideration when evaluating ownership costs for luxury New York City properties. Buyers considering a non-primary residence in NYC should review the potential impact of the surcharge as part of their overall acquisition and holding cost analysis.
As additional guidance and implementation procedures become available, we will continue to provide updates on how this new law may affect real estate transactions throughout New York City.