Anthony Licciardello | May 28, 2026
New York City
After more than a decade of failed attempts, New York has enacted its first pied-à-terre tax — an annual surcharge on high-value second homes owned by people who live outside the city. Here is who actually pays, who is exempt, and why the widely shared "$1 million" figure is misleading almost everyone.
Because it arrived buried inside a sprawling budget — and because the headlines lead with a "$1 million" number — a lot of homeowners are reading it wrong. This guide breaks down the who, when, where, and how, in plain language, and separates what is settled from what the city still has to finalize.
The tax was championed by New York City Mayor Zohran Mamdani and Governor Kathy Hochul, who proposed it jointly in April and folded it into budget negotiations. It delivers on one of Mamdani's central campaign promises: shifting more of the city's fiscal load onto the ultra-wealthy. The Mayor's office framed it as a measure aimed at owners who treat New York real estate "as a vehicle for wealth storage rather than as homes."
The people who pay it are a narrow group: owners of high-value New York City residential property whose primary home is somewhere else — a Westchester estate, a Florida condo, a London flat. The clearest face of the tax became Citadel CEO Ken Griffin, a Florida tax resident who owns a $238 million penthouse at 220 Central Park South. After Mayor Mamdani posted a video outside Griffin's building, Griffin pushed back publicly and threatened to pull business out of New York.
For the vast majority of Staten Island homeowners, this changes nothing. The tax is aimed at multimillion-dollar apartments owned by people who live in Florida or overseas — not the family that's been on Todt Hill or in Great Kills for thirty years. Read it carefully before you let a headline scare you.
When: Passed May 27, 2026. The structure phases in over the city's tax years. The first two years — tax years 2026–2027 and 2027–2028 — use one set of rules for condos and co-ops; a third-year revaluation (from 2028–2029) is planned to bring those units onto the same scale as houses.
Where: All five boroughs of New York City — including Staten Island. The property must sit inside the city; the owner's primary residence must sit outside it. That second condition is what makes this a "pied-à-terre" tax (French for "foot on the ground"): it targets the secondary in-town apartment, not the primary home.
Here is the part that confuses people. New York City assesses condos and co-ops at a small fraction of what they'd sell for — often around 10% or less of true market value. So the law uses the city's assessed market value, not the sale price, to decide who's in. The Governor's office estimates that a $1 million city assessment corresponds to roughly a $5 million apartment in the real world.
That's why the condo/co-op percentages below look steep: they're applied to that artificially low assessed figure, not the market price. Houses are assessed closer to reality, so they use a $5 million threshold and a lower rate.
The "$1 million" you keep seeing is the city's tax-roll value of a condo or co-op — not its asking price. Because the city lowballs those values, a $1 million assessment usually means a roughly $5 million home. The tax was always meant to hit the multimillion-dollar end of the market; the small number is just how the city's books are written.
| Property type | City assessed value | Annual rate |
|---|---|---|
| First two years (TY 2026–27 & 2027–28) — condos & co-ops | ||
| Condo / co-op | $1M – $3M | 4.0% |
| Condo / co-op | $3M – $5M | 5.25% |
| Condo / co-op | Above $5M | 6.5% |
| 1–3 family house (Class 1) | $5M+ | ~0.8%–1.3% |
| Year three onward (planned) — condos & co-ops are re-valued to estimated market price, then taxed on the same ~0.8%–1.3% house scale. | ||
Figures reflect the framework as passed and as reported by CNBC and the Governor's office. The New York City Department of Finance is expected to issue the final implementation rules, including how it will re-value condos and co-ops in year three; some specifics may be refined.
The number that trips everyone up is the one-million-dollar figure. That's the city's assessed value, not what you'd sell for. Because New York assesses condos and co-ops at a fraction of market value, a one-million-dollar assessment can mean a roughly five-million-dollar apartment. Look at the assessment line, not the headline.
The whole design of the tax is to miss primary homes and genuine housing supply. Based on the proposal and the bill language it tracks, a property is carved out when it is:
Proof of primary residency can include a New York State resident income tax return filed at the address, a STAR exemption, or a state homeowner tax credit. Importantly, holding a property through an LLC, trust, or corporation does not dodge the tax — the controlling owner or beneficiary is treated as the owner.
A fair-warning note: because the measure passed inside a fast-moving budget, a few edge cases — multi-owner properties, layered ownership, and the precise documentation the city will accept — are still being finalized in administrative rules. Anyone who may be affected should confirm details with a tax professional once the Department of Finance publishes guidance.
Staten Island is part of New York City, so the law technically reaches it. In practice, the borough's housing stock is dominated by owner-occupied one-, two-, and three-family homes well below the $5 million assessed threshold — so the number of Staten Island properties that will actually owe this tax is very small.
Where it matters most is at the top of the market and for the cross-river crowd: a New Jersey or Florida resident who keeps a luxury Manhattan or Brooklyn apartment as a second home, or a high-net-worth buyer weighing a trophy unit in the city. For them, this is now a yearly carrying cost layered on top of existing property taxes.
If you own a high-end second home in the city and live elsewhere, this is now an annual cost of ownership — not a one-time closing fee. That math belongs in your decision before you list or buy, not after. For everyone else, my advice is the same: confirm your primary-residence paperwork is clean and move on with your life.
Even supporters acknowledge unknowns. Tax analysts note the rental exemption could become a loophole if owners convert units into nominal rentals. Critics, including the Real Estate Board of New York, argue the tax adds volatility to a property-tax system that is valued precisely for its stability — a home that dips below a threshold one year can fall out of the tax entirely. And the planned year-three revaluation of condos and co-ops is a heavy administrative lift the city has not done at this scale before.
None of that changes the headline: the tax is now law, and the first bills will land in the 2026–2027 tax year. The fine print is what's still being written.
Do I owe this tax on my Staten Island house?
Almost certainly not. If the home is your primary residence, you are exempt regardless of value. Even as a second home, a one-, two-, or three-family house only enters the tax at a city assessed value of $5 million or more — extremely rare on Staten Island.
Is this the same as the mansion tax?
No. The mansion tax is a one-time transfer tax paid once at closing. The pied-à-terre tax is a recurring annual surcharge. A qualifying buyer could pay both — the mansion tax once, and the pied-à-terre tax every year they own the home.
Why does the rate say "$1 million" if it's meant for the wealthy?
That $1 million is the city's assessed value for condos and co-ops, which is set far below market price. The Governor's office estimates it corresponds to roughly a $5 million apartment in actual sale terms.
Can I avoid it by putting the property in an LLC?
No. The tax looks through LLCs, trusts, and corporations to the controlling owner or beneficiary, who is treated as the owner for purposes of the primary-residence test.
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Anthony Licciardello is the Broker of The Prodigy Team and a licensed real estate broker in both New York and New Jersey. He previously served as Director of Community Affairs in the Bloomberg Administration and as a member of the Staten Island Growth Management Task Force, where he helped shape real estate planning Kand land-use policy across the borough — experience he brings to every market and policy analysis he writes.
This article is general information for New York and New Jersey property owners and is not legal or tax advice. Tax details reflect the framework as passed on May 27, 2026; final rules from the New York City Department of Finance may refine them. Consult a qualified tax professional about your specific situation.
Prodigy Real Estate is an innovative real estate company offering high-end video production, home valuation services, purchasing, and home sales. Serving New York and New Jersey.