NYC's pied-à-terre tax: Here are the details

Hochul pushing for yearly tax on NYC second homes worth $5M or more

New York Gov. Kathy Hochul is pushing for a yearly tax on New York City residents who own second homes worth $5 million or more,

NEW YORK - New York lawmakers are considering a proposal included in Governor Hochul’s FY27 budget that would create a new surcharge on high-value second homes in New York City, commonly referred to as a pied-à-terre tax.

The proposal targets owners of luxury residential properties who do not use those homes as their primary residence, with state officials arguing the measure would ensure those property owners contribute toward services such as public safety, parks and other city resources.

Under the proposal, one-to-three family homes valued at more than $5 million would face a graduated surcharge based on assessed market value determined through the city’s current property assessment system.

By the numbers:

Homes valued between $5 million and $15 million would pay a 0.8% surcharge, while properties valued between $15 million and $25 million would be charged 1.05%, according to the proposal. Homes valued at $25 million or more would pay a 1.3% surcharge.

State officials provided an example of a single-family home assessed at about $11.5 million. Under the proposal, that property would pay roughly $92,312 annually through the surcharge.

432 Park Avenue along Billionaire's Row in New York, U.S., on Friday, May 1, 2026. Photographer: Michael Nagle/Bloomberg via Getty Images

The proposal also addresses residential co-ops and condominiums, which state officials say are currently valued using an outdated method based on estimated rental value rather than actual sales prices.

City officials would have two years to create a new valuation system based on comparable sales prices, according to the proposal. Once that system is implemented, co-ops and condos would be taxed under the same thresholds and rates as one-to-three family homes.

During the transition period, however, co-ops and condos would be assessed using their current Department of Finance market value calculations.

Under the proposal, properties with assessed values between $1 million and $3 million would face a 4% surcharge. Properties between $3 million and $5 million would be charged 5.25%, while properties valued at $5 million or more would pay 6.5%.

State officials cited an example of a condominium selling for $18.5 million that currently carries a Department of Finance assessed market value of $1.1 million in the proposal. During the first two years, that owner would pay approximately $45,115 annually. Once the new assessment system is implemented, the same property would pay about $194,250 each year.

The surcharge would remain in effect for five years and would require legislative approval to continue beyond that period, according to the proposal. 

What's next:

Lawmakers are expected to review and debate the proposal as part of the broader state budget process.