New York has enacted a new annual surcharge on certain high-value residential properties in New York City that are not used as primary residences. The surcharge applies beginning with the New York City fiscal year that starts July 1, 2026. The New York City Department of Finance (DOF) began its implementation and enforcement of the Pied-á-Terre tax on July 23, 2026, with the mailing of over 31,000 notices to property owners throughout the five boroughs. The DOF originally set late-August 2026 deadlines to file an appeal but extended the deadline to September 18, 2026. An ensuing lawsuit brought by impacted homeowners has created uncertainty regarding enforcement of the tax, but taxpayers should be prepared for any outcome.

Although Governor Hochul indicated during the budget season that the tax would only apply to nonresidents, the statute and regulations as adopted appear to potentially tax residents, including but not limited to those with multiple properties, or those with real property split up among several tax lots, or those who use tiered entity ownership structures to hold real property.

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