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NYC pied-a-terre tax faces court fights, developers expect demand to adjust
The proposed tax would charge owners of second homes 0.8% to 1.3% annually based on market value, while condos and co-ops face 4% to 6.5% in the first year, developers said.
New York Citys proposed pied-a-terre tax has become a flashpoint as it heads through court challenges, with confusion among potential buyers and debate at the city level, according to Bisnow. Mayor Zohran Mamdani unveiled the annual charge in mid-April as part of his “tax the rich” agenda, targeting New Yorkers second homes. The policy has also drawn criticism from President Donald Trump, intensifying uncertainty for people considering purchases, Bisnow reported. Under the proposal, owners of one-, two- or three-family second homes would face an annual tax of 0.8% to 1.3% based on assessed market values. For condos and co-ops, the first-year rates would range from 4% to 6.5%, with the level likely to change after the city determines the units assessed values, according to the City Reporter as cited by Bisnow.
Despite the controversy, developers and property managers at Bisnow’s New York Condos event said they do not expect the policy to have a long-term effect on sales. Peninsula Property Management President Joel Davis said the measure is contentious now but believes the market will adjust over time.