NYC Enforces Pied‑à‑Terre Tax Rules; California Proposes Billionaire Tax

New York City’s Pied‑à‑Terre tax became effective on July 1, 2026, targeting high‑value residences that are not a primary home. The City Department of Finance issued proposed rules that define primary‑residence exemptions based on federal or state tax returns, School Tax Relief (STAR) credits, or other property tax credits. The rules also grant the department audit authority and set penalties ranging from 50 % to 300 % of the tax for misleading documentation or attempts to avoid the tax by subdividing units.

In California, Proposition 40 will appear on the November 2026 ballot. It would impose a one‑time 5 % excise tax on the net worth of individuals and trusts with assets of at least $1 billion. Critics warn the measure could prompt wealthy residents to relocate to lower‑tax states, potentially affecting state revenues and inspiring similar wealth‑tax proposals elsewhere. The initiative remains subject to constitutional challenges.