Burner Prudenti: Pied-à-Terre Tax: What New York City Property Owners Need to Know

Q: What is the pied-à-terre tax and is it something I have to worry about if I own a second residence in New York City?

A: 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 for the fiscal years beginning July 1, 2026, and ending 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.

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 their 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 workweek for convenience and return home far from the city on the weekends.

Who will be taxed and who will be spared? One-family, two-family or three-family homes which are not used as a primary residence with a property tax valuation of $5 million or more are subject to the tax. Also subject to the tax are condominium and cooperative apartment owners with a property tax valuation of $1 million 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.

The tax will not be imposed if an owner applies for an exemption. The exemption is applicable if the property is a primary residence of 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.

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. — Erin Cullen, Esq.

Erin Cullen, Esq. is an associate attorney at Burner Prudenti Law, P.C., focusing her practice on Trusts and Estates. Burner Prudenti Law, P.C. serves clients from New York City to the East End of Long Island, with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.