NYC Second-Home Tax (Pied-à-Terre)

A focused check against the tentative May 7, 2026 NYC budget deal: a proposed annual surcharge on residential property valued at $5M or more when the owner's primary home is outside the five boroughs. The tool tells you whether your situation falls within the proposed structure and estimates the surcharge under the draft rate tiers.

Last reviewed

Status · Tentative budget dealAs of

On May 7, 2026, Governor Hochul and legislative leaders announced a tentative budget deal that would let New York City levy an annual second-home tax (also known as the pied-à-terre tax) on residential property valued at $5M or more, when the owner's primary residence is outside the five boroughs and the property is not rented out regularly.

Next milestone: state legislature passage (still required). Earliest effective date: January 1, 2027, with first annual bills in late 2027.

If you own more than one NYC property at $5M+: run each property through the tool separately. The surcharge applies per property under the proposal, and the threshold and rates are assessed against each property's own market value.

Property

A handful of yes/no questions to determine whether the surcharge would apply at all.

Do you own or have year-round access to a residential property in NYC's five boroughs (Manhattan, Brooklyn, Queens, Bronx, Staten Island)?

The surcharge is NYC-specific. Property in Westchester, Long Island outside the city, or elsewhere in NY State is out of scope.

Answer the property questions above to see whether the proposed surcharge would apply.

Status & timeline

May 7, 2026
Tentative budget deal between Governor Hochul and legislative leaders includes the surcharge.
Next
State legislature must pass the measure, either as part of the budget or separately.
Effective
Earliest January 1, 2027. First annual bills issue late 2027. NYC Department of Finance would administer.
Universe
Roughly 5,400 NYC properties cross the $5M market-value floor.

Sources

Manual tracking creates long-term data risk

The proposal is in flux. Rate tiers, definitions, and the rental carve-out's threshold can change between announcement and final bill — and the bill's final text is what binds.

If the carve-out for properties 'rented out regularly' applies to you, you'll need contemporaneous records: rental days, gross rent, lease terms, and whether the tenant is using it as a primary residence. Reconstructed answers tend to fall apart.

The $5M threshold is a hard cliff on market value, not assessed value. Markets move year to year, and a property near the line crosses in and out of scope as the appraisal does.

The threshold is a hard cliff. The carve-out is undefined.

Whether you're inside or outside depends on records the moment they're asked for.

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The answer is always current.

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Related: New York Residency Risk Checker · New York Residency guide

Questions

Is the New York second-home tax (pied-à-terre tax) enacted?
Not yet. On May 7, 2026, Governor Hochul and legislative leaders announced a tentative budget deal that includes the surcharge. The state legislature still has to pass it. The earliest effective date is January 1, 2027, with first annual bills issuing late 2027. NYC Department of Finance would administer. The proposal is commonly called the pied-à-terre tax in policy discussions; in practice it's a tax on second homes. Both names describe the same thing.
Who would the second-home tax apply to?
Owners of NYC residential property valued at $5 million or more (market value), when the owner's primary residence is outside the five boroughs and the property is not rented out regularly. Suburban Westchester, Connecticut, Florida, London: all qualify the NYC place as a pied-à-terre or second home. Roughly 5,400 properties citywide cross the $5M floor.
What rates does the tool use?
The draft tiers from the 2019 proposal that the new deal mirrors: 0.5% annually on value between $5M and $10M, 1.5% on $10M and $25M, and 4% above $25M. The structure is marginal (bracket-based), so a $10M property owes about $25,000 a year, consistent with the published worked example. Final rates aren't set yet; the budget bill could change them.
What counts as 'rented out regularly'?
Not yet defined. The proposal carves out properties rented out regularly, but no published threshold (days per year, percentage of time) is set. Tax attorneys have flagged this as a real ambiguity. If the property is rented year-round to a primary-residence tenant, it should fall comfortably inside the carve-out; part-time / Airbnb-style rental sits in a gray zone.
How is this different from New York statutory residency?
Statutory residency (the 184-day + permanent place of abode test) is current New York State law and turns on whether you live in NY enough to be a resident. The second-home tax is the inverse: it targets non-residents who own high-value NYC property. Most owners are in one bucket or the other, not both. The companion New York Residency Risk Checker covers the residency question.
Does the second-home tax use assessed value or market value?
Market value, not the lower NYC assessed value used for general property tax. Owners are expected to be able to challenge valuations annually. This makes the surcharge meaningfully larger than what an 'assessed value × rate' calculation would suggest.

This tool provides a structured estimate based on general rules and user inputs. It is not legal or tax advice and does not determine residency or tax status. For specific guidance, consult a qualified professional.