Summary: New York has passed new “second-home/pied-à-terre tax” rules, imposing phased taxes on non-primary residences valued at more than $1 million. From 2026 to 2028, rates range from 4% to 6.5%, and from 2028 to 2029 the tax rate will be lowered while reassessments are based on comparable sales.
New York Passes “Second-Home/Pied-à-Terre Tax”: Who Pays and at What Rate
New York City’s new tax will significantly increase property tax bills for many owners of ultra-luxury apartments. State lawmakers have passed a tax aimed at non-primary residences to help close the city’s budget gap.
The so-called “pied-à-terre tax” will apply to second homes valued at $1 million or more and is expected to generate about $500 million in tax revenue for the city.
Phased taxation: 2026-2028 rates set by valuation brackets
Tax details obtained by CNBC show that the property tax will be implemented in two stages. The first stage covers tax years 2026-2027 and 2027-2028: condos and co-ops valued at more than $1 million, as determined by the New York City Department of Finance/Tax Department, will fall within the tax base.
In the first stage, rates rise by valuation bracket: 4% a year for $1 million to $3 million; 5.25% for $3 million to $5 million; and 6.5% above $5 million.
Although the rates look high, tax experts say the city’s valuation and assessment system significantly undervalues properties, reducing the nominal tax burden. Experts note that city valuations are often only 10% or less of true market value.
From 2028-2029: reassessment based on comparable sales, with lower rates to offset the change
The city will not immediately overhaul the system. Instead, it will gradually update valuations and tax burdens according to budget documents. Starting in tax year 2028-2029, property values will be assessed based on comparable sales. Because valuations are expected to rise sharply, the corresponding tax rates will be reduced to offset the increase.
Under the budget proposal, after the valuation adjustment a new rate structure will apply: 0.8% for the $5 million to $15 million bracket; 1.05% for the $15 million to $25 million bracket; and 1.3% above $25 million.
New York property tax attorney Robert Pollack said, “This is very complicated.”
Billionaire and Citadel CEO Ken Griffin became a focal point after New York City Mayor Zohran Mamdani posted a video announcing the tax in front of Griffin’s penthouse. Griffin later pushed back, threatening to pull business and jobs from New York in the future.
Ken Griffin as an example: Manhattan property taxes could soar
According to CNBC estimates, under the new tax, Florida tax resident Ken Griffin’s Manhattan property tax bill could more than triple.
Griffin bought the penthouse at 220 Central Park South in 2019 for $238 million. The unit is about 24,000 square feet. However, government records show the city values the apartment at only $15.5 million. Based on city records, Griffin’s property tax for tax year 2026-2027 is $858,332.
In the first two years of the pied-à-terre tax, Pollack said Griffin’s property taxes would rise to more than $1.87 million. In tax year 2028-2029, that figure would climb to nearly $4 million.
In addition, Griffin reportedly bought two apartments at 740 Park Ave for a combined $84 million. After taxation begins in 2028, the tax burden on those properties is expected to be $1.1 million, bringing his total Manhattan property tax bill to more than $5 million.
Although city officials say the wealthy can “afford it,” real estate brokers and tax lawyers say the policy could cause significant “sticker shock.”
Pollack said, “All of my clients already feel they pay too much. These numbers matter. No matter how rich you are.”
