PWS Client Alert: NYC’S Pied-à-Terre Tax

What Property Owners Need to Know

New York has enacted a new pied-à-terre tax that could increase the tax burden for certain owners of high-value New York City residences not used as primary residences.

If you own or maintain a New York City residence that is not your primary residence, now is a good time to determine whether the new tax may apply to you and whether any exemptions may be available.

---

What We Know So Far

• The new tax is scheduled to take effect on July 1, 2026, and is currently scheduled to expire on June 30, 2031, unless extended by future legislation.
• Although additional guidance is expected, several key points are already clear:
• The tax applies to certain high-value New York City residences that are not used as the owner’s primary residence.
• Property owners will have an opportunity to demonstrate that a property qualifies as their primary residence.
• Primary residences generally are exempt; other exemptions may be available.
• The tax applies to one-, two-, and three-family homes, condominiums, and cooperative apartments.
• During the initial implementation period, condominiums and cooperatives valued at $1 million or more and one-, two-, and three-family homes valued at $5 million or more may be subject to the tax.
• Depending on the property’s value and classification, initial surcharge rates may range from 0.8% to 6.5%.

What Should You do Now?

The law includes narrow exceptions for certain roles, including positions that:Property owners should begin reviewing:

• Whether their property qualifies as a primary residence;
• Existing ownership structures;
• Trust and estate planning arrangements;
• Residency considerations; and
• Potential exemption opportunities as additional guidance becomes available.

Because the application of the new tax will depend on individual circumstances, an early review may help identify planning opportunities and avoid unexpected tax exposure.

STEIN ADLER IS HERE TO HELP

Stein Adler’s Private Wealth Services Group is actively monitoring developments related to the new Pied-à-Terre Tax and advising clients regarding potential exemptions, ownership structures, residency considerations, and planning opportunities. We expect additional guidance in the coming months and will continue to provide updates as more information becomes available.

If you have questions regarding how the new tax may affect your New York City real estate holdings, please contact Jason Lederman or a member of Stein Adler’s Private Wealth Services Group.