US News

Wealthy New Yorkers find few loopholes to avoid new pied-à-terre tax

The annual tax on expensive second homes has sparked anger, confusion, and a legal challenge as affluent property owners seek workarounds.

Updated Aug 26, 2026 · 09:23 UTC1 reports

The short version

New York's new annual pied-à-terre tax targets high-value second homes, condos, and co-ops where owners do not primarily reside.
The city's rollout of warning letters and public property lists has generated significant frustration among wealthy owners and their advisors.
A lawsuit briefly halted the process in August, but the city appealed and the rollout continues as legal proceedings move forward.

The annual pied-à-terre tax was backed by Governor Kathy Hochul and Mayor Zohran Mamdani, and passed by the state legislature in May.[Business Insider]
The tax applies to one-, two-, and three-family homes valued over $5 million, and condos or co-ops valued by the city at more than $1 million.[Business Insider]
The mayor's office estimates that the tax will generate approximately $500 million in annual revenue.[Business Insider]
In August, three homeowners filed a lawsuit that temporarily paused the rollout, but the city's prompt appeal allowed the implementation process to resume.[Business Insider]
Tax advisors and attorneys report that the statute leaves very few viable options for wealthy owners to legally avoid the levy without renting out the properties or designating them as primary residences.[Business Insider]

It remains to be seen how the courts will rule on the ongoing lawsuit, although advisors are instructing clients to assume the city will ultimately collect the tax.[Business Insider]
It is unclear how the city will resolve complex ownership structures and grey areas, such as homes held by trusts or properties undergoing long-term renovations.[Business Insider]