New York's first pied-à-terre tax is back on the table. Governor Hochul and Mayor Mamdani announced a joint proposal this month to levy an annual surcharge on New York City second homes valued at $5 million or more.
The structure targets one- to three-family homes, condos, and co-ops owned by people whose primary residence sits outside the city. The rate is still being negotiated with the legislature and is expected to scale with property value.
At the top end, proposals reach 4% on properties above $25 million — $1 million a year on a $25M apartment, on top of existing property taxes.
Two features matter for planning. The trigger is primary residence, not time spent in the apartment. For executives who split time between California and New York, exposure turns on where residency is claimed. The proposal also includes look-through rules for LLCs and trusts, so entity ownership doesn't shield the property when the beneficial owner lives elsewhere.
Prior versions of this proposal stalled over valuation mechanics and legal challenges. This one has political support from both Albany and City Hall, with the rate and effective date still open.
San Francisco and Los Angeles have already moved in the same direction. San Francisco taxes property transfers above $10M at elevated rates, and Los Angeles's mansion tax adds a surcharge on sales above $5M. The mechanics differ from an annual surcharge, but high-end residential keeps getting singled out for additional tax.
For California residents holding New York property, nothing is due or owed yet. But if you're modeling carrying costs on a Manhattan apartment, a five- or six-figure annual surcharge is a scenario worth mapping out.
For educational purposes only. Not tax, legal, or investment advice.