New York City pied-à-terre tax faces legal challenges

New York City has implemented a pied-à-terre property surcharge targeting residential properties that are not the owner’s primary residence. Scheduled to take effect on July 1, 2026, the tiered tax applies to condominiums and co-ops valued over $1 million, as well as one-to-three family homes valued above $5 million. The tax uses flat rates rather than marginal ones; for example, a property valued between $3 million and $5 million is subject to a 5.25% annual rate.

Exemptions are available for primary residences, properties owned by immediate family members, or homes occupied by bona fide tenants under leases of at least 12 months.

The tax has faced legal challenges. In a lawsuit filed by developer Steve Wynn and former Secretary of Commerce Wilbur Ross with his wife Hilary Geary Ross, the state and city are currently seeking a change of venue. While the plaintiffs filed the suit in Suffolk County, the state argues the case should be moved to New York County because the claims involve real estate held within New York City. Plaintiffs contend the move is an attempt to secure a more favorable judicial audience.