NYC’s New Pied-à-Terre Tax: Your Questions Answered

Mairav Rothstein, Senior Tax Counsel,
David M. Barral, Senior Wealth Advisor
Jane G. Ditelberg, Chief Tax Strategist

August 2026

The New York City pied-à-terre tax has been signed into law. Intended to target residential properties held as secondary residences or short-term rentals, the tax applies to homes worth at least $5 million that are not the primary residence of an owner, an immediate family member of the owner, or a tenant with a qualifying lease.¹ Applicable as of January 5, 2026, it is scheduled to sunset on June 30, 2031.

Below, we answer key questions on how the tax is applied, rates and valuations, and steps owners can take now to prepare.

What is the legal status of the tax?

The legal status of the pied-à-terre tax remains in flux. A lower court temporarily halted enforcement of the law, but subsequent appellate proceedings have permitted the city to continue implementing the tax while litigation is ongoing. Because future court decisions could affect the tax's operation, the discussion below describes the law as currently enacted while acknowledging that its ultimate application remains uncertain.

What are the tax rates, and how is valuation calculated?

Because the pied-à-terre tax is based on property value, owners should first understand which value applies. The Department of Finance assigns each property an annual value, reflected in the Notice of Property Value, but not all residential property is valued the same way under current city rules.

For co-ops and condominiums, the city’s income-capitalization method generally produces values well below fair market value — often 20% or less. As a result, during the 2026–2028 interim period, the tax applies to co-op and condominium apartments with a Notice of Property Value of $1 million or more, which is roughly intended to correspond to the $5 million fair market value threshold for other residential property. The interim rates for co-ops and condominiums are higher to account for that difference in valuation methodology.

Beginning in 2028, the Department of Finance is expected to use a uniform fair market value approach, at which point the same brackets and rates will apply across property types.

Any property owner can retrieve the Notice of Property Value from the Department of Finance website at the Property Tax Public Access web portal: NYC Finance.

The following charts show the brackets and rates in two categories. Category A is for condominiums and co-ops for 2026 and 2027, and Category B is for all other situations.

While the first and second phases appear to deviate dramatically, that appearance is illusory, and the tax imposed during both phases should stay relatively constant. For example, if an apartment has a fair market value of $10 million, the current Notice of Property Value would be approximately $2 million under the current valuation methodology. Starting in 2028, their Notice of Property Value should also be approximately $10 million. If that apartment’s fair market value remains $10 million for the five-year duration of the pied-a-terre tax, the owner’s $80,000 pied- à-terre tax bill should not change dramatically between the first and second phases of the tax.

Will my property be subject to the tax?

For a property to be a primary residence, and thus exempt from the tax, the owner, certain family members of the owner (i.e., spouse, child, sibling, parent, grandparent or grandchild) or a qualified lessor must occupy the home for a majority of the year. In seeking to demonstrate that a property is a primary residence, the Department of Finance will rely on verification of the resident having filed their federal and local tax returns using the address of the home in question. Ownership of a fractional interest in the property by an individual using the home as a personal residence is sufficient.

Note, if the resident is not the owner of the home, the Department of Finance will require documentation to show that the necessary relationship exists between the parties. The rules address how to identify the individuals who are the relevant owners for purposes of establishing a family relationship (e.g., birth certificate, affidavits, marriage certificate). The rules likewise establish what constitutes a qualifying lease (including an arm’s length month-to-month lease). Additionally, certain other properties are excluded from the tax, including properties for which a certificate of occupancy is required but has not been issued and unsold condo/cooperative units held by a sponsor.

For residences owned by trusts, the rules are more complex: A trust-owned residence can qualify as a primary residence if it is the primary home of a beneficiary with a present right to benefit from the trust. Occupancy by a beneficiary whose interest is conditioned on a future event generally does not qualify.

How will the tax be collected?

There is a difference in the method of collecting the pied- à-terre tax for co-ops vs. condominiums. Because the co-op corporation collectively owns all the apartments, it is the co-op that must pay the tax; consequently, the co-op management collects the tax from any shareholder whose apartment  is not a primary residence. For a condominium building, the permitted owner of each apartment that is not a qualifying primary residence will pay the tax directly to the Department of Finance.

What steps can I take to prepare?

Even while the statute’s validity remains in dispute, owners of potentially affected properties can begin gathering the information needed to assess their exposure. Start by confirming the property’s Notice of Property Value with the Department of Finance, since that value will drive any potential tax calculation. Next, determine whether the property may qualify as a primary residence for the owner, an eligible family member or, if the property is leased, a tenant with a qualifying lease. Because the address used on federal and local income tax returns is a key indicator of primary residence, reviewing those filings can help identify potential documentation issues. With this information, owners and their advisors can make a preliminary assessment of whether the tax may apply and, if so, estimate the potential cost.

¹ The legislative findings published with the law implementing the pied-à-terre tax give the following rationale for the imposition of a tax on second homes in New York City: “The residents of New York City and many who do business here contribute daily to the health and vibrancy of the city through their economic activity and the taxes they pay. However, many of the city's most valuable homes are held as second homes, allowing the owners of those homes to reap considerable benefits from the city's broader economy, from city services, and from a vibrant real estate market. The legislature finds that it is prudent to impose a surcharge on the owners of these second homes to maintain important city services.”