Accounting Today reports that New York City’s new pied-à-terre tax takes effect July 1, bringing an annual surcharge on qualifying second homes and leaving many high-end property owners with limited options to avoid the new levy. 

Championed by Mayor Zohran Mamdani and signed into law by Gov. Kathy Hochul in May, the tax applies to second homes above certain value thresholds. During the first two years, co-ops and condominiums with assessed values of at least $1 million will face surcharges ranging from 4% to 6.5%, while single-family homes with assessed values of $5 million or more will pay an additional 0.8% to 1.3% on top of existing property taxes. 

According to attorneys and brokers, many owners explored strategies such as transferring properties to LLCs or trusts, renting units at nominal rates or completing purchases before the law took effect. However, experts say the legislation includes relatively few loopholes. As Ben Williams, head of the property tax department at Rosenberg & Estis, explained, “You either use it as your primary residence or not.” 

The law includes exemptions for qualifying primary residences, long-term market-rate rental properties and certain close family members who occupy the home as their primary residence. Owners will be notified by the end of August if the city determines their property was not a primary residence as of January 2026, after which they will have 30 days to demonstrate eligibility for an exemption. 

Real estate professionals expect the surcharge to influence buying and selling decisions in the luxury market, with some owners already lowering asking prices or considering selling second homes altogether.