NEW YORK (BLOOMBERG) — More than 31,000 properties are potentially subject to New York City’s new pied-à-terre tax on second homes, according to data published Friday by the city’s Finance Department.
City and state officials initially estimated that roughly 10,000 properties would be subject to the tax when it was passed in May. The city began notifying property owners of their potential liability on Thursday.
The list is the city’s first attempt to identify highly valued second homes in the five boroughs and doesn’t necessarily represent the final roster of properties subject to the new surcharge. Officials and private tax and real estate attorneys expect many will be removed as owners appeal.
The initial number represents the number of properties identified by the city with fair market valuations above the thresholds at which the new tax will be applied. More than 6,800 Class 1 Properties, which include one, two and three family homes and townhouses, were identified, as well as more than 24,700 Class 2 properties, which include co-ops and condominiums.
“This is the list that the Department of Finance will use to identify properties that are potentially subject to the new non-primary residence property surcharge,” a spokesperson for the agency said.
New York Governor Kathy Hochul pushed to include the tax in the state’s $277 billion budget. The measure is expected to raise $500 million annually, helping New York City Mayor Zohran Mamdani close a multibillion-dollar deficit.
The rollout of the tax is being closely watched amid questions about whether it will raise as much revenue as anticipated and how it will affect the city’s luxury real estate market. Industry leaders fear it could chill demand for higher-end properties and inspire second-home owners to sell.
City officials have limited visibility into how a residence is being used, said Ben Williams, who leads the property-tax department at Rosenberg & Estis. For example, what looks like a second home on paper may actually be rented and subject to an exemption.
“It’s going to be over-inclusive at first, and a lot of properties are going to get caught up,” Williams said.
Property owners will be billed by Aug. 30 and will have 30 days after receiving formal notice to contest their levy. The city has launched a website with information about the surcharge, including details on how to appeal and what qualifies a property for exemption.
A final list of the second homes subject to the tax will be released on Dec. 31.
The tax is one of several similar levies that have been imposed across the US. In 2026, Montana placed higher tax rates on second homes and short-term rentals, while lowering rates for full-time residents. Rhode Island enacted a tax on luxury nonprimary residences worth more than $1 million that took effect this month.
Real estate and tax attorneys raised alarms at a hearing this month over New York’s proposed implementation of the second-home tax, questioning the timeline for filing appeals and how the city will handle complicated ownership structures.
The New York City Finance Department said it plans to provide resources for property owners, including 311 operators trained to answer questions about the tax and the appeals process, as well as a team to review inquiries and paperwork and staff specially trained to handle complex cases.
The tax will be levied in two phases. In the first two years, single-family homes with market values of $5 million or more will pay rates from 0.8% to 1.3%, while co-ops and condominiums worth $1 million or more will pay 4% to 6.5%.
After July 1, 2028, all single-family homes, co-ops and condominiums worth $5 million or more, as determined under a new valuation system, would pay the same tax rates. Those worth $5 million to $15 million would pay a rate of 0.8%, while those worth $15 million to $25 million would pay 1.05% and those worth $25 million or more would pay 1.3%.
The city is “committed to implementing the new nonprimary residence property surcharge fairly and efficiently,” Finance Commissioner Richard Lee said in a statement. “We will ensure the process is carried out transparently and with careful consideration at every step.”
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