New York expands luxury second‑home tax, lowering threshold and adding surcharge

New York’s legislature unveiled a two‑step plan to increase taxes on high‑value secondary residences. The first step raises the assessed value of second homes worth more than $2 million—by 15 % for properties between $2 million and $5 million and by 25 % for those above $5 million—aiming to generate about $120 million annually.

The second step adds a transaction‑based surcharge: 0.5 % of the sale price for second homes over $2 million and 1 % for sales exceeding $10 million, projected to bring roughly $80 million per year. Exemptions apply for inheritances and transfers to immediate family that retain the property as a secondary residence for at least five years.

A related adjustment lowered the tax’s applicability threshold in New York City from the originally discussed $5 million to a market‑value benchmark of $1 million, expanding the pool of homes subject to the new levy. Lawmakers present the measures as a way to capture revenue from under‑utilized luxury vacation properties while keeping primary‑home owners’ taxes unchanged.