New York City can keep moving forward with the pied-à-terre tax rollout after the Appellate Division, Second Department let the program resume while the legal challenge continues. The stay leaves the city’s August 31, 2026 hearing in place and follows a short-lived pause by Staten Island Supreme Court Judge Wayne Ozzi on August 10, 2026.
- On August 10, 2026, Judge Wayne Ozzi issued a temporary restraining order halting enforcement of the levy and the city’s published property list after homeowners challenged the rollout.
- On August 11, 2026, the city appealed, and Associate Justice Philip Hom stayed Ozzi’s order until the August 31, 2026 hearing.
- The Department of Finance extended the response deadline from August 21, 2026 to September 18, 2026 for property owners who received notices.
- The city is targeting one- to three-family homes valued at $5 million or more and condos valued at $1 million or more, with rates reaching 6.5% and projected annual revenue of $500 million.
- New York City has started mailing non-primary residence surcharge notices to luxury property owners starting July twenty-third, 2026.
- The tax targets properties valued over five million dollars or condos with high assessments to fund public services.
- Affected owners have a thirty-day window to appeal their classification through a new city online portal.
New York City Mayor Zohran Mamdani’s administration began mailing notices Thursday to owners of luxury properties that may face the city’s new non-primary residence surcharge. The program covers certain second homes, including one- to three-family homes, condominiums and co-ops.
Free toolSubstantial Presence Test CalculatorThe city’s comptroller estimates that 13,500 properties could be affected. Officials project the measure will raise $1 billion annually for parks, libraries and schools.
The first letters went out on July 23, 2026. Owners identified as holding non-primary residences will have 30 days to challenge that classification.
The bills come later.
The surcharge took effect on July 1, 2026, after the New York State Legislature approved it on May 27 as part of the $268 billion 2026–2027 state budget agreement. The city’s Department of Finance published final rules on July 14.
Mamdani promoted the rollout in a message to owners of expensive second homes:
“If you have a second home in New York City worth more than $5M, check your mailbox when you’re back in the five boroughs — because you’ve got mail.”
He also wrote that the city had sent letters notifying owners that its new pied-à-terre tax was coming soon. The mayor described the measure as part of his campaign promise to tax wealthy New Yorkers.
The surcharge uses different tests for houses and apartments
One- to three-family homes face the surcharge when their market value exceeds $5 million and the owner’s primary residence sits outside New York City. The same outside-residence condition applies to condominiums and co-ops, but the initial rules use a separate assessed-value threshold for those units.
During fiscal years 2026 through 2028, condos and co-ops with a Department of Finance assessed value of at least $1 million fall within the initial surcharge structure. The city applies rates ranging from 4% to 6.5% of assessed value.
The house rates are lower but apply to market value. One- to three-family properties face rates from 0.8% to 1.3%.
The numbers can produce large bills.
A $1.1 million co-op, for example, could incur a $44,000 annual surcharge. A $6 million condo could face a charge as high as $390,000 per year, depending on its assessed value and applicable rate.
| Property category | Valuation test | FY 2026–2028 surcharge range |
|---|---|---|
| One- to three-family homes | Market value above $5 million | 0.8% to 1.3% |
| Condominiums and co-ops | Department of Finance assessed value of $1 million or more | 4% to 6.5% |
A property generally qualifies as a primary residence when the owner or an immediate family member lives there, or when the property is leased to a primary resident for at least one year. The city determines that status using information dated January 5, 2026.
Owners get a short window to dispute the classification
The notification identifies properties the city believes may be non-primary residences. Owners can appeal through an online portal.
The first-year notices must arrive by August 30, 2026. The 30-day appeal period begins when an owner receives the letter, according to the rollout rules.
The Department of Finance and the appeals operation added 24 new jobs for administration, reviews and challenges. Finance Commissioner Richard Lee said the city would carry out the program “fairly and efficiently.”
The first surcharge payments are due on January 1, 2027.
The city’s estimates vary sharply on both homes and revenue
Mark Levine’s comptroller’s office estimates that about 13,500 properties will be affected. Other city-facing analyses place the number closer to 11,000 to 11,200 residences.
The revenue projections also diverge. The administration has said the surcharge could produce $1 billion each year, while other projections tied to city estimates put annual revenue at $500 million.
Later analysis has placed potential collections between $340 million and $380 million, depending on exemptions, property valuations, enforcement and how owners respond. Those responses could include selling units or changing primary residency.
The differences reflect more than a counting dispute. The number of properties that meet the rules may not equal the number that ultimately produces revenue.
The measure followed years of failed attempts
The surcharge became law after roughly a decade of unsuccessful efforts to impose a levy on luxury second homes. Its passage came as the city and state sought revenue during a historic multi-billion-dollar budget gap.
Governor Kathy Hochul said owners of ultra-luxury second homes should contribute more to the city. She wrote:
“Working New Yorkers already do their part. That’s why I made sure owners of ultra-luxury second homes contribute more to the city that makes New York the greatest in the world.”
The policy has drawn resistance from real estate groups and legal advisers, who have questioned the city’s property assessment system. They have also warned that wealthy owners could respond by selling New York units or moving their primary residences to Florida.
Some owners have already made their plans public.
Real estate developer Charles Kushner announced that he would leave New York City for Florida, citing the new surcharge and the political climate. Ken Griffin, the billionaire founder of Citadel, also signaled that he would “double down” on his Miami presence after a public dispute with Mamdani over the measure.
The program’s first operational test arrives before the first payment date. Owners must decide whether to accept the city’s classification or use the 30-day appeal period to contest it.
The city expects payments to begin January 1, 2027, while the notices and appeals process start months earlier. The department’s online portal will handle those challenges.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
