As part of New York’s 2026–2027 budget legislation, the state has enacted a new “pied-à-terre” tax on certain luxury residential properties in New York City that are not used as primary residences.
Effective July 1, 2026, the annual surcharge will generally apply to qualifying high-value second homes, condominiums, and cooperative apartments located within New York City.
The tax is aimed primarily at nonresident owners of luxury residential properties and will apply based on property value thresholds and residency status. During the initial phase of implementation, the surcharge will apply to certain class one properties valued at $5 million or more and condominium or cooperative units valued at $1 million or more.
Beginning in 2028, the valuation methodology will transition to a comparable-sales approach for determining whether a property meets the applicable thresholds.
The New York City Department of Finance will annually determine whether a property qualifies as a primary residence and may require supporting documentation from property owners.
Owners of potentially affected New York City properties should review their residency status, property use arrangements, and valuation considerations to better understand how the new surcharge may impact them.
If you have questions regarding how this legislation may affect your situation, please contact a member of our tax team.