Mansion Tax vs. Pied-à-Terre Tax

Two taxes, two logics

They are routinely confused — not least because the 2019 mansion tax exists precisely because the pied-à-terre tax failed that year (that story here). The distinction:

	Mansion tax (+ supplemental transfer tax)	Pied-à-terre surcharge
What it is	One-time transfer tax paid by the buyer at closing	Annual surcharge while the home is a non-primary residence
Since	1989; progressive rates since July 2019	July 1, 2026
Trigger	Purchase price ≥ $1M — any NYC home, any use	Non-primary residence; condos/co-ops over $1M assessed value, houses over $5M market value
Rates	1% at $1M rising in steps to 3.9% at $25M+	Condos/co-ops 4%–6.5% of assessed value (Phase 1); houses 0.8%–1.3% of market value
Avoidable?	Not meaningfully — it attaches to the transaction	Yes — primary residence (owner or immediate family) or a 12-month arm's-length lease exempts the unit; details in the guide
Recurring?	No	Every year through at least June 30, 2031

Worked examples (illustrative)

The $3M pied-à-terre condo

At closing: mansion tax at the $3M bracket (buyer pays). Holding: whether the annual surcharge applies depends entirely on the unit's assessed value — many $3M condos sit under the $1M assessed threshold and owe nothing; some in high-income buildings do not. This is the case where owners most need their actual NOPV number rather than a guess.

The $8M second-home condo

At closing: mansion tax in the 2.25% range ≈ $180,000, plus standard transfer costs. Holding: if the assessed value runs, say, $1.6M and no exemption applies, Phase 1 surcharge ≈ 4% of the $600k over the threshold — about $24,000 every year. Over a five-year hold that approaches the mansion tax all over again — except this one is optional: a qualifying 12-month lease zeroes it.

The $25M townhouse kept for visits

At closing: mansion tax at 3.9% ≈ $975,000. Holding: house schedule applies — 0.8% on market value between $5M–$15M plus 1.05% on $15M–$25M ≈ $185,000 a year while it remains a non-primary residence. A child living there as their primary residence, or a one-year lease, eliminates it.

Examples are simplified estimates for education, assuming graduated brackets on value above each threshold; they are not tax advice. Your actual numbers depend on DOF's figures for your property.

The strategic picture for second-home owners

The mansion tax is sunk cost — it shaped what you paid going in, and nothing changes it. The pied-à-terre surcharge is a live annual decision: every year you can pay it, lease your way out of it, move a family member in, or sell the asset. That decision deserves real numbers: your assessed value, your unit's achievable 12-month rent, and its current sale value. Pulling those three numbers for owners — free — is exactly what our exposure review does. The main guide covers the rules; How It Passed covers why they exist.