Key takeaways
- New York State enacted its first pied-a-terre tax in the FY2027 budget, signed by Governor Kathy Hochul on May 28, 2026, after she and Mayor Zohran Mamdani proposed it on April 15, 2026.
- It is an annual surcharge on non-primary residences, effective July 1, 2026 and sunsetting June 30, 2031. In its first phase the threshold is $5 million of Department of Finance market value for one to three family homes and $1 million for condos and co-ops.
- The Governor's office projected at least $500 million a year; the City Comptroller put it nearer $340 million to $380 million. Counts of the affected properties run from the 13,000 cited in April to the City Comptroller's modelled 11,226.
- The rate schedule is published. Condos and co-ops pay 4 percent from $1 million to $3 million, 5.25 percent to $5 million and 6.5 percent above it; one to three family homes pay 0.8, 1.05 and 1.3 percent in bands from $5 million.
The Tax That Kept Coming Back Just Arrived
For more than a decade, the pied-a-terre tax was the idea that would not die and would not pass. Sponsors in Albany and at City Hall floated it, narrowed it, and shelved it across multiple administrations. For buyers eyeing a full-floor residence on Central Park South, it stayed a hypothetical, a line item to stress-test but not to pay. That changed in 2026.
On April 15, 2026, Governor Kathy Hochul and Mayor Zohran Mamdani proposed the state's first pied-a-terre tax. The Legislature passed it in late May as part of the FY2027 budget, and the Governor signed it on May 28, 2026. It took effect on July 1, 2026 and sunsets on June 30, 2031 unless extended. For Billionaires' Row, a corridor built almost entirely on second homes, this is no longer a debate. It is a planning problem.
What the Enacted Tax Actually Says
Read the statute carefully, because the specifics decide who pays and how much. Here is what the enacted law sets:
- It is an annual surcharge, not a closing cost. The tax recurs every year you hold the property. That is the whole point, and it is what separates it from the mansion tax and transfer taxes that hit once at purchase.
- The threshold is not one number. Through June 30, 2028 it is $5 million of Department of Finance market value for one to three family homes and $1 million for condominiums and co-ops, with co-ops valued on an imputed market value allocated by share count and billed to the corporation. From July 1, 2028 every class converges on a $5 million threshold at the one to three family rates, valued on arm's-length comparable sales.
- It targets non-primary residences. The surcharge applies when the property is not the primary residence of its owner, of an immediate family member, or of a tenant on a bona fide long-term lease. Note the trap in the shorthand: this is not only a tax on out-of-state owners. A New York City resident who owns a second unit in the city owes it too, because only one home can be a primary residence.
- The revenue projection is contested. The Governor's office projected at least $500 million a year and the enacted financial plan carries $506 million for fiscal 2027. The City Comptroller, modelling rental and behavioural adjustments, put it nearer $340 million to $380 million.
The sponsors named the kind of owner they were aiming at, pointing to residences used for wealth storage rather than as homes, and referenced some of the most expensive properties in the country, including the Midtown penthouse Ken Griffin bought for a publicly reported figure near $238 million. At the proposal stage Governor Hochul's office put roughly 13,000 New York City properties in scope. Post-enactment client alerts have circulated counts of roughly 10,000 and roughly 14,000 without citing a source, while the City Comptroller's own published modelling lands at 11,226. Treat any single count as an estimate and check which stage it came from.
The Rate Schedule
The April proposal left the rate blank. The enacted law does not. Through June 30, 2028, condominiums and co-ops pay 4 percent of market value from $1 million to $3 million, 5.25 percent from $3 million to $5 million, and 6.5 percent above $5 million. One to three family homes pay 0.8 percent from $5 million to $15 million, 1.05 percent from $15 million to $25 million, and 1.3 percent above $25 million. The rate is not graduated across the bands: a $30 million single-family home pays 1.3 percent on the whole value, or $390,000 a year. From July 1, 2028 all classes move to a single $5 million threshold at the one to three family rates, with market value set by arm's-length comparable sales rather than by the statutory rental-income method.
The Cost Math
The surcharge is tied to the City's valuation, so cost scales with that figure rather than with what you paid. The arithmetic is simple multiplication, and it compounds over a long hold. That is exactly why the buyer pool watches it. A one-time closing cost is a known quantity you absorb once. A recurring annual charge changes the internal rate of return on holding a trophy asset for ten or twenty years.
Here is the disciplined way to underwrite it:
- Anchor to what exists today. Price the asset against the taxes already on the books, covered below and in our overview of the pied-a-terre tax and Manhattan luxury real estate.
- Add the surcharge layer. Apply the published rate for the property's class against its Department of Finance market value, then see how the carrying profile changes across a realistic hold, including the 2028 step when the thresholds converge.
- Pull the valuation, not the price. As the next section explains, how the City measures value matters as much as the rate itself.
That approach prices the liability that exists rather than the one that was proposed.
Valuation Is Where the Money Is
The consequential question is not the rate. It is which value the threshold attaches to. New York City's property tax system assigns condos and co-ops market and assessed values that sit far below their sale prices, because state law has the Department of Finance base those values on theoretical rental income rather than on what units actually trade for. The enacted law sets the condominium and co-op threshold at $1 million of that Department of Finance market value, not at $5 million and not at sale price. Published summaries are not unanimous on the point: most read the threshold as market value, one reads it as assessed value, and the difference is material enough to confirm against your own unit.
The City Reporter laid out the gap on April 22, 2026, while the measure was still a proposal, and the figures are striking. A condo at 432 Park Avenue that sold for $26 million carried a Department of Finance market value just under $1.9 million and an assessed value of $785,477. Reviewing records at that tower, the outlet found no residential unit that would clear a $5 million threshold under its assessed value, and exactly one, bought for $91 million in 2017, that would clear it under market value. Read against the $1 million condominium threshold the State actually enacted, the same numbers point the other way: a market value just under $1.9 million sits squarely inside the tax. Sting's 220 Central Park South apartment, bought for $65.7 million in 2019, carries a current assessed value near $1.89 million.
The threshold that matters on Billionaires' Row is $1 million of City market value, and very little on the corridor sits below it.
One illustration of the spread is the 96th-floor penthouse at 432 Park Avenue, which sold for $87.7 million back in 2016. That is a past sale, not a current transaction, but it shows the disconnect cleanly: per The City Reporter, that unit's Department of Finance market value is $3.8 million and its assessed value is $1.6 million. A $5 million threshold tied to those numbers would have missed it entirely. The $1 million condominium threshold the State enacted does not.
Manhattan Borough President Brad Hoylman-Sigal, who carried earlier versions of the bill for more than a decade, put the case this way when the proposal was announced: the global superrich who use New York City real estate to park their wealth should contribute to the city services that protect and sustain that investment. The takeaway for a buyer is concrete: the number that sets your liability is the Department of Finance market value, not your purchase price, so pull it before you close.
Why Billionaires' Row Sits at the Center of This
Billionaires' Row is not a price tier. It is a geography, the corridor along West 57th Street and adjacent blocks just south of Central Park, anchored by Central Park Tower, 220 Central Park South, 111 West 57th Street, and One57. Standard residences along the Row trade in the single-digit to mid-eight-figure range, while full-floor units and penthouses run into nine figures at the top.
As our Billionaires' Row NYC guide lays out, demand here concentrates among international principals, family offices, and finance buyers who treat these residences as a store of value as much as a place to sleep. Many own through limited liability structures for privacy and estate planning. A large portion of these homes are, in the plainest sense, pied-a-terres held by owners whose primary residence is elsewhere. That is precisely the ownership the tax targets.
So the surcharge does not graze the Row. It aims at it. Yet two forces pull in opposite directions, and a serious buyer should weigh both.
Scarcity Cuts the Other Way
The supply of true trophy inventory on Billionaires' Row is structurally limited. The modern corridor was created by a delivery cycle of supertall towers from roughly 2014 to 2022, and full-floor residences with direct Central Park exposure trade rarely. Much of the highest-tier activity happens off market, through sponsor allocations and broker networks, not on public platforms.
Genuine scarcity tends to blunt the impact of carrying-cost taxes at the very top. When only a handful of full-floor residences with protected park views exist, the buyers who want them are not easily deterred by an annual surcharge, however unwelcome. The pressure would likely fall hardest on the more interchangeable inventory, the lower and mid-floor units where buyers have closer substitutes, and least on the irreplaceable trophy floors.
The Taxes That Already Exist Today
The new surcharge sits on top of a cost structure trophy buyers already carry. Before modeling the pied-a-terre layer, understand the base.
- The mansion tax. New York applies a mansion tax to residential purchases at and above $1 million, graduated so the rate rises as the price climbs into the higher tiers. On a trophy purchase, this is one of the larger single line items at closing.
- Transfer taxes. New York State and New York City both levy real property transfer taxes. On new-development condominium purchases, the sponsor often shifts the transfer tax obligation to the buyer, which raises the all-in cost of a sponsor sale relative to a resale.
- Recurring carrying costs. Trophy owners already pay substantial annual property taxes, common charges, and maintenance. The pied-a-terre surcharge is a new recurring line item layered onto those.
Buyer closing costs run roughly 3 to 5 percent on new-development condos where sponsor closing costs apply, and closer to 2 to 3 percent on resale. Foreign buyers also encounter FIRPTA withholding on the seller side, and most Billionaires' Row boards are structured to accommodate global buyers and LLC ownership. That is the baseline. The pied-a-terre tax is the new variable on top of it.
How This Interacts With the Move to Florida
You cannot discuss a New York tax on second homes without discussing Florida. The migration of wealth from New York to South Florida has been a defining capital-flow story of the last several years, and tax treatment is a central driver. Florida has no state income tax, and for a buyer weighing where to anchor a primary residence, the comparison is stark.
The new tax sharpens that comparison in a specific way. Some Billionaires' Row owners keep their New York apartment as the secondary home precisely because their tax domicile is elsewhere. An annual surcharge aimed at non-primary New York owners raises the cost of that exact arrangement. Our breakdown of the NYC to Miami tax migration walks through how serious buyers are running these numbers.
The effect is not symmetrical, though. A buyer who relocates a primary residence to Miami may still want a New York foothold, and a foothold is, by definition, a pied-a-terre. So the same migration that takes income-tax domicile to Florida can leave behind exactly the kind of non-primary New York ownership this tax targets. The two trends interact rather than cancel out, and the net result depends on a given buyer's structure, holding plan, and tolerance for recurring cost. Running the actual figures is the point, and the NYC to Miami tax calculator and the broader Manhattan versus Miami real estate comparison are the right starting points.
What It Means for Billionaires' Row Demand
With the tax enacted and its rates published, the shape of the likely outcome is clearer than any single number.
- Top-tier trophy demand is the most insulated. Scarcity, off-market dynamics, and store-of-value motivation protect the full-floor and penthouse segment. These buyers are the least price-sensitive to an annual carrying charge.
- Mid-tier inventory carries the most risk. Standard residences with closer substitutes, in Manhattan or in competing global markets, would feel the surcharge more directly in pricing and absorption.
- Valuation still decides the size of the bill. The threshold is low enough to catch the corridor, but it is the Department of Finance market value, not the sale price, that sets what each owner actually pays.
- Florida stays in the frame. Any increase in New York carrying costs feeds the migration narrative, particularly for buyers who can move a primary residence without giving up a New York presence.
None of this argues for sitting on the sidelines. The rates are published and the thresholds step again in 2028, and the buyers who do best on this corridor understand both the current cost structure and what is now on the books. Underwrite the asset against today's actual taxes, apply the published surcharge to the property's own Department of Finance market value, and decide with full information.
Thinking about a trophy purchase or sale? Our brokers work the Manhattan and Miami markets every day. Message us on WhatsApp for a private, no-pressure conversation.
FAQ
Is there a pied-a-terre tax in New York City as of 2026?
Yes. Governor Kathy Hochul and Mayor Zohran Mamdani proposed the state's first pied-a-terre tax on April 15, 2026; the Legislature passed it in late May as part of the FY2027 budget and the Governor signed it on May 28, 2026. It took effect on July 1, 2026 and sunsets on June 30, 2031 unless extended. It is an annual surcharge on residences that are not the primary residence of their owner, of an immediate family member, or of a tenant on a bona fide long-term lease, with a first-phase threshold of $5 million of Department of Finance market value for one to three family homes and $1 million for condominiums and co-ops.
How much would the pied-a-terre tax cost on a trophy apartment?
It depends on the property class and on the City's valuation rather than on the price paid. Through June 30, 2028 condominiums and co-ops pay 4 percent of Department of Finance market value from $1 million to $3 million, 5.25 percent to $5 million and 6.5 percent above it, while one to three family homes pay 0.8, 1.05 and 1.3 percent in bands from $5 million. The rate applies to the whole value rather than band by band, so a $30 million single-family home pays 1.3 percent, or $390,000 a year. Because Department of Finance market values on trophy condominiums run far below sale prices, the bill on a nine-figure apartment turns on a valuation you should pull before modelling anything.
What is the difference between the mansion tax and the pied-a-terre tax?
The mansion tax is a one-time tax paid at closing on residential purchases at or above $1 million, with a graduated structure that rises as the price increases. The pied-a-terre tax is a recurring annual surcharge on non-primary residences, with a first-phase threshold of $1 million of City market value for condominiums and co-ops and $5 million for one to three family homes. The mansion tax is a cost of buying. The pied-a-terre tax is a cost of holding, year after year.
Could trophy condos avoid the pied-a-terre tax through assessed value?
Far less easily than the April proposal suggested. As The City Reporter reported on April 22, 2026, the Department of Finance assigns condos and co-ops market and assessed values that run far below their sale prices, because the system is based on theoretical rental income rather than what units actually trade for. The outlet found that at 432 Park Avenue, a condo that sold for $26 million carried a Department of Finance market value under $1.9 million. That reporting tested a $5 million threshold. The enacted law sets the condominium and co-op threshold at $1 million of that same market value, so units the proposal would have missed sit inside the tax, and from July 1, 2028 valuation moves to arm's-length comparable sales.
How does this connect to people moving from New York to Florida?
Florida has no state income tax, and rising New York carrying costs feed the existing migration of wealth to South Florida. A pied-a-terre tax raises the cost of keeping a non-primary New York home, which is exactly the arrangement many relocating buyers favor. The two trends interact rather than cancel out, since a buyer who moves primary domicile to Miami may still want a New York pied-a-terre, which is the precise ownership the new tax targets.
Where to Take This Next
If you are evaluating a residence on the corridor, start with the inventory and the cost structure side by side. Review current opportunities through our Billionaires' Row apartments for sale page, then run your own numbers against the NYC to Miami tax calculator to see how a New York position compares with a Florida one under your specific structure. When you are ready to discuss off-market options or model a long-term hold against the pied-a-terre tax at its published rates, reach out to our advisory team for a private conversation.
