New York luxury second-home tax set for July, rates 0.8%-6.5%

Topline

New York lawmakers are finalizing the state’s budget, which is set to include a pied-à-terre tax targeting secondary single-family homes in New York worth $5 million or more. The tax could go into effect as soon as July 1, according to Bloomberg.

New York lawmakers will vote on the measure Wednesday.

Key Facts

• Vote scheduled: New York’s state legislature will vote on the measure Wednesday.
• Initial tax rates for co-ops and condos: Second co-ops and condos with a market value of $1 million or more would be taxed between 4% and 6.5% during the first two years of the tax rollout, according to multiple reports.
• Surcharge on single-family homes: A 0.8% to 1.3% surcharge would be paid by secondary single-family homes with market values of $5 million or more, Bloomberg reported.
• Uniform tax rates after two years: Following the first two years, a uniform tax rate would apply across all single-family homes, co-ops, and condos:
• 0.8% for homes worth $5 million to $15 million
• 1.05% for homes worth $15 million to $25 million
• 1.3% for homes worth $25 million or more
• Notification and exemptions: Property owners included in the tax will be notified by Aug. 30, Bloomberg reported. Owners can contest their inclusion. New Yorkers who primarily live in the city will be exempt, as lawmakers have framed the tax as targeting property owners who are not full-time New York City residents. Exemptions also include properties occupied by immediate family members and properties leased as rental units.
• Market value vs. assessed value: Market value is the estimated sale price in the real estate market, while assessed value is determined by a local tax assessor for annual property taxes. New York Gov. Kathy Hochul’s office has claimed a $1 million market value equals a sales value of about $5 million, The New York Times reported. However, the Times noted the difference is usually more pronounced, citing a Midtown Manhattan penthouse with a $4.2 million market value that sold in 2024 for over $135 million.
• Cash purchase tax not included: A first-of-its-kind 1% tax on homes worth more than $1 million purchased with cash was floated earlier this month but was not included in the draft legislation reported by Bloomberg.

Political Context

New York City Mayor Zohran Mamdani announced the pied-à-terre tax last month in a video recorded outside hedge fund billionaire Ken Griffin’s New York City penthouse. The mayor said the tax would target “those who store their wealth in New York City real estate, but who don’t actually live here.”

Mamdani also proposed a 9.5% property tax hike that he later dropped amid backlash from homeowners and the city council, shifting his focus to the pied-à-terre tax, which has garnered backing from Gov. Hochul. Hochul estimates the measure will raise $500 million.

President Donald Trump and Griffin, whose estimated net worth is $50.7 billion, criticized Mamdani over the tax. Griffin said the measure could jeopardize a $6 billion expansion in New York City led by his hedge fund. Trump said losing “people like Ken… would be a big loss for New York.”

Related Coverage

• Trump Suddenly Blasts Mamdani Over Pied-À-Terre Tax—A Surcharge On $5 Million Secondary Homes (Forbes)
• Trump Warns Mamdani Over Property Tax Hikes—Amid Mayor’s Spat With Billionaire Ken Griffin (Forbes)
• Ken Griffin’s Citadel Suggests $6 Billion NYC Project May Be At Risk Over Mamdani Tax (Forbes)

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