New York City Pied-à-Terre Tax Raises Many Questions
9.18.2026
Last May, New York State enacted a law to charge a tax on high-value New York City properties that are kept as second homes, otherwise known as a pied-à-terre. With the tax going into effect this year, property owners and attorneys have a short timeframe to understand it.
The New York State Bar Association hosted a seminar on the tax, its impact on co-ops and condos, and the effect on real estate in New York City. Nearly 250 people attended.
The speakers were:
- Erica F. Buckley, partner at Nixon Peabody, and co-chair of the New York State Bar Association Real Property Law Section’s Condominiums and Cooperatives Committee.
- Elizabeth Pascal, partner at Hodgson Russ.
- Jeffrey S. Reich, partner at Schwartz Sladkus Reich Greenberg Atlas.
William McCracken, partner at Moritt Hock & Hamroff and member of the Real Property Law Section Executive Committee, moderated the discussion.
The pied-à-terre surcharge tax takes effect for the 2026 tax year, with first payments due on Jan. 1, 2027. It applies to family homes with a market value at least $5 million and condos and co-ops with a market value of at least $1 million.
There is an exemption for people who use their property as a primary residence. This exemption is based on 2025 tax filings.
“One of the things we’re seeing is where people have purchased property now subject to the surcharge – but after Jan. 5, 2026,” said Pascal. “So technically, whether it was used as a primary residence or owned in a certain way depends on the prior owner. There’s no way to address that in a sales agreement. I have another client that moved out and is now using [their property] as a pied-à-terre. But they moved out on Jan. 21. So under the law, it meets the requirements to be exempt from the surcharge.”
Initially, property owners had a deadline of Sept. 18 to prove that they are primary residents and are thus exempt from the tax. The deadline has been extended to Oct. 6.
“The pied-a-terre tax presents cooperatives with timing issues,” said Reich. “First, the time that it will take to implement, to adopt, and have passed the necessary proprietary lease language. But putting that aside, and working with the language that we have currently and the statute, we don’t know when we’re going to get final notice as to who’s affected, who the tax is going to be imposed on. It’s due on Jan. 1, so if we don’t find out until, let’s say, mid-November – when the tax roll comes out – that doesn’t give boards a lot of time to have the monthly statements for those affected shareholders.”
Reich added that it causes uncertainty as to how buildings will pay for the tax now – even if they are found to be exempt and apply for a refund later.
The panelists also raised the possibility that this could be the start of more changes in New York City property tax law.
“I think that there are some of us that are concerned that the city could potentially use the pied-à-terre legislation as grounds for trying to completely change the way they tax all Class 1 and Class 2 properties,” said Buckley. “They could say, ‘this is the legislation we’ve been waiting for that you never gave us. You’ve now given it to us, and we have this mandate, and so now we’re going to broadly use it.’”
The webinar was sponsored by the New York State Bar Association’s Tax Section and the Real Property Law Section’s Condominiums and Cooperatives Committee. View the full program here.
