The short version
The original Hoylman bills (2014, revived 2019 — history here) proposed a single sliding surcharge of 0.5% to 4% on the market value of second homes above $5 million, all property types treated alike. The enacted 2026 law (how it passed) splits the world in two: houses keep a market-value test at $5M+, but condos and co-ops are taxed on Department of Finance assessed value above just $1 million, at much higher nominal rates — with a promised migration to a market-value model in 2028, exemptions the old bills never had, and a five-year sunset.
| 2019 proposal | 2026 enacted law | |
|---|---|---|
| Condo/co-op base | Market value | DOF assessed value (Phase 1, to 2028), then DOF market-value model |
| Condo/co-op threshold | $5,000,000 market | $1,000,000 assessed |
| Condo/co-op rates | 0.5%–4% (graduated) | 4% / 5.25% / 6.5% (graduated over $1M/$3M/$5M assessed) |
| 1–3 family homes | Same 0.5%–4% over $5M | 0.8% / 1.05% / 1.3% over $5M/$15M/$25M (5-yr avg market value) |
| Family exemption | Narrow | Primary residence of spouse, child, sibling, parent, grandparent or grandchild qualifies |
| Rental exemption | Unclear | Arm's-length lease ≥12 months to a primary-resident tenant exempts the unit |
| Entity look-through | Basic | Explicit: trusts via beneficial owners, entities via majority holders; no-majority entities taxable regardless of occupancy |
| Sunset | None | June 30, 2031 |
| Administration | New annual appraisals (the fatal flaw) | Existing DOF assessed values + property-tax billing machinery |
Why the condo base changed — and why it matters enormously
The 2019 bill died substantially on administrability: valuing unique luxury units at market every year invited a decade of litigation. The 2026 drafters solved it by borrowing the number the city already produces for every unit — the assessed value on your NOPV, which for Class 2 property derives from capitalized income, not sales comps. That number is usually a fraction of sale price.
The consequences cut both ways:
- Some owners who panicked needn't have. A $4M-market-value condo can carry an assessed value comfortably under the $1M threshold and owe nothing — for now.
- Some owners who felt safe aren't. In high-income buildings, units that would never have hit a $5M market test clear $1M assessed — and the rates on assessed value are 4–6.5%, not 0.5–4%.
- Phase 2 reshuffles the deck. On July 1, 2028, condos and co-ops shift to a DOF market-value approximation aligned with the house schedule. Owners near either threshold should re-run the numbers annually.
What the industry won
REBNY and the brokerage community fought the steepest drafts and lost the war but won meaningful battles: the sunset clause, the family-member exemption, the 12-month-lease exemption (which converts the tax into, effectively, a vacancy tax on luxury units), the deferral of market-value assessment to 2028, and keeping Senator Fahy's $2.5M-threshold upstate companion off the budget. For owners, the lease exemption is the single most valuable concession — it means the surcharge is optional for anyone willing to rent their unit to a real tenant for a year. That trade-off is exactly what our free exposure review models.
What the 2019 fight left behind
One more artifact of the failed 2019 push still bites every luxury buyer today: the progressive mansion tax (up to 3.9%) and supplemental transfer tax Albany enacted instead. New York's second-home owners now face both regimes — the one-time 2019 consolation prize at closing, and the annual 2026 surcharge for holding. How they stack is covered in Mansion Tax vs. Pied-à-Terre Tax.
Which side of the thresholds are you on?
We'll pull your unit's actual assessed value and tell you what you'd owe now, what changes in 2028, and whether leasing or selling beats paying. Free, same day.
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