New York City's Pied-à-Terre Tax (2026)

Overview

On 15 April 2026 Mayor Zohran Mamdani and Governor Kathy Hochul jointly announced that the state budget would include New York's first pied-à-terre tax: an annual surcharge on one- to three-family homes, condominiums and co-ops in New York City that are not their owner's primary residence. The announcement projected roughly $500 million in annual revenue. Mamdani framed it as "taxing the ultra-wealthy and global elites"; Hochul's line was that "if you can afford a $5 million second home that sits empty most of the year, you can afford to contribute."[2] The Legislature passed the measure on 27 May 2026 as part of the FY2026-27 state budget, adding a new Article 30-C to the Tax Law and a new Chapter 32 to Title 11 of the city's Administrative Code; it took effect 28 May, applies from 1 July 2026, and sunsets on 30 June 2031.[1][4]

The Mayor's Office billed it as the state's first pied-à-terre tax, and it is the first recurring levy of its kind in New York.[2]

Design

The surcharge is administered by the city's Department of Finance (DOF), which adopted its implementing rule on 14 July 2026.[1][3] Two features distinguish it from an ordinary property-tax increase.

Thresholds and rates. For tax years 2026-27 and 2027-28 the levy applies to one- to three-family homes that DOF values above $5 million and to condominium and cooperative units it values at $1 million or more, on a rising scale:[1]

The odd-looking gap between the two schedules is a product of New York's assessment law rather than of any policy intent to tax apartments more heavily. DOF is required to value condos and co-ops as if they were rental buildings, which yields "market values" far below sale prices, so the statute uses lower thresholds and higher rates on those figures to approximate the same burden. From July 2028 a second phase switches condos and co-ops to a comparable-sales valuation and folds them into the home schedule, with the $5m/$15m/$25m bands and 0.8%–1.3% rates applying to everything.[4] Co-op corporations pay the surcharge and pass it through to the shareholder concerned; an unpaid surcharge is a lien on the property, which for a co-op means the whole building.[4]

Exemptions. A property escapes the surcharge if it is the primary residence of the owner, a tenant, an immediate family member of the owner, the majority interest holder in an entity that owns it, or the sole beneficiary of a trust that owns it.[1] Owners of properties over the thresholds had to submit an exemption application by 6 October 2026, a date extended twice from the original summer deadline; properties found subject to the surcharge see it on the bill due 1 January 2027.[1]

Implementation and Litigation

DOF began mailing notices to owners of potentially affected properties on 23 July 2026, with Mamdani calling it "the first step in implementing this tax and collecting critical revenue to fund our parks, schools and libraries."[5] A group of homeowners sued over the adequacy of the notice period and on 10 August obtained a temporary restraining order from a state trial court halting enforcement; an appellate panel in Brooklyn lifted the order on 13 August and allowed the rollout to continue, after which the city extended the exemption deadline to 6 October.[4] The underlying suit was still pending as of the last review of this page.

The Mondaq client alert that prompted this page notes that Rhode Island, Hawaii and Montana have adopted differential taxes on non-primary residences in the same period; Montana's 2026 schedule is described on the Montana page.[4]

Assessment

Georgists have reason to watch this levy without mistaking it for their own policy.

• It is a tax on total property value, not on land. The base is DOF's market value of the whole property, buildings included. Nothing in the statute distinguishes location value from structure value, so it does not carry the neutrality argument that attaches to a land value tax.
• Its target is non-occupancy of scarce locations. By exempting every property that is somebody's primary residence, the surcharge falls specifically on homes held as second residences, investments or empty pieds-à-terre in the most location-rich market in the country. That is the same target as British Columbia's speculation and vacancy tax and Vancouver's empty homes tax, and the behaviour it is meant to discourage is the one described at Speculative Vacancy. A high-value pied-à-terre consumes a location the community made valuable while adding little to local economic activity, which is why Hochul's "sits empty most of the year" framing has a Georgist ring even though the instrument does not.
• It exposes the city's assessment problem. The two-phase design exists only because New York's statutory valuation of condos and co-ops bears little relation to their prices, a defect that also undermines the accuracy of any land-based tax the city might later adopt. See Mass Appraisal Methods for how the city's assessment practice compares with modern methods.
• The revenue is real but small. Against the city's roughly $2.5 trillion in measured land value, $500 million a year is a rounding error; the levy's significance is political, as the first recurring tax in the state aimed explicitly at absentee holders of high-value urban property.

See Also

• New York City — the city's land-value figures and its other Georgist episodes
• Speculative Vacancy — the behaviour the surcharge is designed to discourage
• British Columbia — the speculation and vacancy tax, the closest North American analogue
• Vancouver — the empty homes tax
• Montana — the 2026 second-home and vacant-lot ratio enacted in the same period
• Mass Appraisal Methods — why condo and co-op valuations forced the two-phase design
• Land Value Tax — the policy this surcharge is not

Sources

1. New York City Department of Finance, "Non-primary residence property surcharge" (official programme page; retrieved 2026-09-21). nyc.gov — used for the thresholds, the full rate tables for tax years 2026-27 and 2027-28, the exemption categories, the 6 October 2026 application deadline, the 1 January 2027 billing date, and the 28 May 2026 effective date (A-claim; official primary source).
2. Office of the Mayor of New York City, "Mayor Mamdani, Governor Hochul Announce State's First Pied-à-Terre Tax," press release, 15 April 2026. nyc.gov — used for the $500 million revenue projection, the Mamdani and Hochul quotations, and the announced scope (A-claim for the officials' own statements; the revenue figure is a projection, not an outturn).
3. New York City Department of Finance, "Rule Relating to Surcharge on Certain Non-Primary Residences," NYC Rules, effective 14 July 2026. rules.cityofnewyork.us — used for the rule's adoption date and its citation of Chapter 32 of Title 11 of the Administrative Code (A-claim).
4. Dani R. Goldberg, Joshua Headley & Philip R. Hirschfeld (Buchanan Ingersoll & Rooney PC), "NYC's High-Value Property Tax: An In-Depth Look at the Pied-à-Terre Levy and Its Challenges," Mondaq, 7 September 2026. mondaq.com — used for the two-phase valuation design and the July 2028 switch, the co-op pass-through and lien exposure, the 10 August restraining order, its 13 August reversal, the deadline extension, and the comparison to Rhode Island, Hawaii and Montana (B-claim; law-firm client alert, relied on for statutory and procedural facts only). Statutory location (Tax Law Article 30-C; Administrative Code Title 11, Chapter 32), the 27 May 2026 passage date and the 1 July 2026 to 30 June 2031 effective period are from Sullivan & Cromwell LLP, "New NYC Non-Primary Residence Tax," memo, July 2026. sullcrom.com (B-claim; law-firm memo).
5. Office of the Mayor of New York City, "Mayor Mamdani Notifies Property Owners of New Pied-à-Terre Tax," press release, 23 July 2026. nyc.gov — used for the start of notifications and the Mamdani quotation (A-claim for the office's own statements).