NYC Comptroller Mark Levine Releases Comprehensive Estimation of a Potential Pied-à-Terre Tax and Highlights Key Variables

NYC Comptroller Mark Levine Releases Comprehensive Estimation of a Potential Pied-à-Terre Tax and Highlights Key Variables

New York, NY - The Office of New York City Comptroller Mark Levine today released The Pied-à-Terre Tax and Its Potential Revenues, a detailed analysis and estimation of potential revenues that could be collected from high-value second homes. The report found that as much as $510 million could plausibly be raised annually, but a number of substantial variables in the design, implementation, and enforcement of the program could result in the estimate falling to between $340 million and $380 million.

"As we continue to work toward budget agreements at the City and State levels, it's imperative that government leaders, advocates and New Yorkers know how major new revenue proposals might reliably impact our budget," said New York City Comptroller Mark Levine. "This report provides a clear-eyed, impartial analysis of the proposed pied-a-terre tax - what it could raise, where the uncertainties are, and what assumptions must be clarified. I am committed to working with my partners across the City and State to ensure our budget meets the needs of New Yorkers."

The Office examined the proposed tax on residential properties valued at $5 million or more that are not used as primary residences - commonly referred to as "pied-à-terre" properties - and evaluated its potential role in addressing the City's structural budget gap, including as part of the FY 2027 spending plan.

While a pied-à-terre tax could plausibly raise significant revenue, the Office found the estimates are limited not only by the tax rates, but by key unresolved questions about how the City's Department of Finance will address key factors, including: primary-residence ownership and rental exemptions, co-op and condo valuation, treatment of two- and three-family homes, and potential behavioral changes.

Key Findings

• Based on modeled tax rates and brackets derived from prior proposals, the tax could generate approximately $500 million annually from an estimated 11,200 high-value second-home properties.
• Revenues could be reduced, however, to between $340 million and $380 million depending on key variables, including:
  • Exemptions for properties that are rented out
  • Behavioral responses, such as changes in ownership or usage patterns following implementation
  • This means that a higher rate schedule than the one used in the analysis may be needed to meet the $500 million revenue target
• The report recommends the Department of Finance and the Mayor's Office of Management and Budget publish detailed data assumptions, including potential behavioral changes, supporting the revenue estimates.

The findings also outline several unresolved legal, policy, and implementation questions that could materially affect revenue outcomes and administrative feasibility. These include whether this is a property tax; how different ownership structures will be treated; and enforcement and compliance mechanisms.

You can read the full report by clicking here: https://comptroller.nyc.gov/reports/the-pied-a-terre-tax-and-its-potential-revenues

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