Tax Insight

New York final budget includes “pied-à-terre tax”

Insight
5 minute read
August 04, 2026

What happened?

As part of its enacted budget revenue legislation, New York created a temporary New York City surcharge, commonly referred to as the pied-à-terre tax, on certain high-value residential properties that do not serve as a primary residence. Effective July 1, 2026, through June 30, 2031, the surcharge generally applies to one-to-three-unit homes valued at $5 million or more and certain condominium and cooperative units, with thresholds, rates, and valuation methods that vary by property class and phase of implementation. [S. 9009C, enacted May 28, 2026]

Why is it relevant?

The new surcharge may create a significant additional property tax cost for owners and investors in high-value New York City residences that are not used as a primary residence. It also introduces uncertainty regarding how the Department of Finance will determine whether a property qualifies as a primary residence and how covered condominium and cooperative units will be valued, particularly during the initial phase of implementation.

Actions to consider

Owners and investors should assess whether their properties fall within the applicable value thresholds, review how each residence is owned and used, and retain documentation supporting primary-residence status where appropriate.