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The “Pied-à-Terre Tax” is also known as the “Non-Primary Residence Property Surcharge.” It is an annual tax imposed by the New York City Department of Finance on secondary residential properties, or a property within the five boroughs which is not a primary residence. The tax will be in effect from the fiscal years which began on July 1, 2026, and will end June 30, 2031, unless it is renewed. It is a luxury tax intended to fix the budget gap without reducing essential services offered by the city.
What does pied-à-terre mean?
Pied-à-terre might sound pleasant, but the tax itself will not be so pleasant for those who own property in New York City that is not his or her primary residence. “Pied-à-terre” is a French phrase that translates to “foot on the ground”. It typically refers to an apartment or home being used part-time or for a limited purpose. The phrase is sometimes associated with those who may stay in the city during the work week for convenience and return home far from the city on the weekends.
Who pays the NYC pied-à-terre tax?
One-family, two-family, or three-family homes which are not used as a primary residence with a property tax valuation of five million dollars or more are subject to the tax. Also subject to the tax are condominium and cooperative apartment owners with a property tax valuation of one million dollars or more. By July 2028, the tax will somewhat reduce its scope, and will only apply to single-family homes, cooperative apartments and condominiums with a property tax valuation of $5 million or more.
How Can You Avoid the pied-à-terre tax in NYC?
The tax will not be imposed if an owner applies for an exemption. The exemption is applicable if the property is a primary residence to the owner, a member of the owner’s immediate family, a tenant or subtenant who rents on an annual basis, someone with a majority ownership interest in the house, part-owners who together have a majority ownership interest, or beneficiaries of a trust which owns the property. However, the exemption is not automatic and to be considered for the exemption, an application must be filed. This year’s deadline to apply for an exemption is September 18, 2026.
Talk to an Attorney About the pied-à-terre tax Today
Property owners who are worried about the tax should reach out to a trusted legal advisor to determine what their options are and if an exemption might apply to their situation. There will likely be a lot of challenges for this tax to remain in effect, so time will tell if it makes it to 2031.
