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 DOF market value, houses over $5M market value
Rates	1% at $1M rising in steps to 3.9% at $25M+	Condos/co-ops a flat 4%–6.5% of full market 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 DOF market value — and because that income-based figure runs far below sale price, many $3M condos sit under the $1M market-value 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 its DOF market value runs, say, $2.4M and no exemption applies, the flat Phase 1 surcharge is 4% of the entire $2.4M — about $96,000 every year. Over a five-year hold that dwarfs the one-time mansion tax — 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: the house schedule applies as a flat rate on full value — at a ~$25M market value that is 1.05% of the whole ≈ $262,500 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; the surcharge is a flat bracket rate applied to the unit's full market value once it clears the threshold, not a marginal rate on the excess. 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 DOF market 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.

Questions owners ask

Is the mansion tax the same as the pied-à-terre tax?

No. The mansion tax is a one-time buyer-paid transfer tax of 1% to 3.9% on NYC home purchases of $1 million or more, due at closing regardless of how you use the home. The pied-à-terre tax is an annual surcharge, effective July 1, 2026, that applies only while a covered property is not anyone's primary residence.

Can I owe both the mansion tax and the pied-à-terre tax?

Yes. A buyer of a $8 million Manhattan condo used as a second home pays the mansion tax once at closing (2.25% bracket at that price) and then, if the unit's DOF market value exceeds $1 million and no primary-residence exemption applies, the annual pied-à-terre surcharge every year they hold it.

Does renting my apartment out avoid either tax?

Renting avoids the pied-à-terre surcharge (an arm's-length lease of at least 12 months to a tenant using it as a primary residence exempts the unit) but has no effect on the mansion tax, which is a closing tax on the purchase itself.