New York City started sending out letters to tens of thousands of property owners who may have to pay the new tax on second homes next year – known as the non-primary residence tax, or pied-à-terre tax, for properties valued at $5 million or more.

The tax was a key part of Albany’s help to close the city’s budget gap as well as satisfying Mayor Zohran Mamdani’s push to raise taxes on the wealthy.

What You Need To Know

New York City started sending out letters to tens of thousands of property owners who may have to pay the new tax on second homes next year – known as the non-primary residence tax, or pied-à-terre tax, for properties valued at $5 million or more

The tax was a key part of Albany’s help to close the city’s budget gap as well as satisfying Mayor Zohran Mamdani’s push to raise taxes on the wealthy

The second home tax would apply to properties assessed at $5 million or more owned by non-primary city residents

In a cheeky social media post, Mamdani sent a message to some property owners: check your mail.

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.

Today, we sent notification letters to property owners, letting them know that our new pied-à-terre tax is coming soon.

The best…

— Mayor Zohran Kwame Mamdani (@NYCMayor) July 23, 2026

The second home tax would apply to properties assessed at $5 million or more owned by non-primary city residents.

The new property tax assessments will be different for single- to three-family homes, and then for condominiums and co-ops assessed at $1 million to $3 million, and then $5 million and over.

“This is the first time the city is doing a tax like this,” said Ana Champeny, the vice president for research at the Citizens Budget Commission.

“This isn’t like you’re buying an apartment and the bank sends an appraiser and they look at the condition of your cabinets and the condition of the floors. It is very much computer-modeled based on trends, statistics, and other factors. So it’s not going to involve someone going into the buildings,” she added.

Owners can also apply for exemptions if the unit is rented or occupied by a family member.

“We’re not against the pied-à-terre tax, but Jan. 5, 2026, already passed. People already filed their tax returns for this year, and they were not given the option of making another decision,” said Rebecca Poole, of the Council of New York Cooperatives and Condominiums – a primary advocacy group representing homeowner interests across the five boroughs.

“If one shareholder doesn’t meet their financial responsibility, then that burden will fall on everyone else, and potentially there’ll need to be an assessment. Obviously, there’s a hope that the Department of Finance will work with buildings,” she said.

Poole argued that one of the biggest challenges will be assessing new values for co-op units, as right now, an entire building is assessed in one tax lot compared to condo and single-family owners who pay an individual tax bill.

“The biggest concern is for the smallest co-ops because obviously, if you’re one of 50 or one of 100, being able to spread out that missing expense is easier than, or that missing income is easier than if you’re one of five,” added Poole.

She warned against some potential changes in the market.

“We may see more sales activity if folks don’t want to hold on to their units and pay the tax. We may see tax prices of these units decrease because there is an additional tax that the new owner has to pay. So, they may be willing to pay less for the unit. We may see the developers choose not to build,” said Champeny.

City Comptroller Mark Levine’s office estimates 13,500 properties are likely to be impacted.

The majority? Condos, followed by single-family homes. The report also said it’ll generate double original projections: $1 billion instead of $500 million.

“If the revenue doesn’t materialize, the city will need to make it up elsewhere, either through other revenues or through reductions in spending,” Champney said.

The debate also opens the door to property tax reform that has to be enacted on the state level, turning into a political question.

“You want to do it in a mayor’s second term. They are term-limited in New York, so not when you’re running for re-election. You don’t want to do it in an election year for either the state legislature,” said Champeny.

“We have been embarking on discussions about property tax reform since the late 1980s, and we have yet to hit this perfect year where all the stars align,” she added.

The city also published a list of properties and owners who could be subject to the tax.