New York created the pied-à-terre tax to generate revenue from wealthy people who own high-value second homes in the city. But since Albany passed the law this spring and Mayor Mamdani’s administration began sending notices this summer, New Yorkers are fighting to prove that their homes are not second homes at all.
The flawed rollout has been well documented. Hundreds of thousands of primary residents had their names and addresses published online, while thousands more received notices requiring detailed documentation with little Department of Finance (DOF) guidance. The state confirmed it is using this inaccurate data for income tax enforcement before anyone has had an opportunity to correct a DOF error.
The city does not have the information it needs to accurately administer the tax, a problem that is acute for the city’s more than 3,000 co-op buildings. If one shareholder fails to pay, the liability falls on the building and every shareholder. Interest accrues at 18% against the building’s property tax account, and a large unpaid lien could put its mortgage at risk, even though co-op boards have none of DOF’s collection or enforcement powers.
There are practical solutions that state and city leaders can pursue to fix these problems.
First, the tax should not apply retroactively. The law looks back to Jan. 5, 2026, nearly five months before it was enacted on May 28. During that period, owners had no idea a second-home tax would be enacted. They had no opportunity to sell, rent the apartment or have a family member make it their primary residence.
Thousands of homes changed hands during that period. A new owner could now owe a tax because the previous owner used the property as a second home. The state should eliminate the retroactive application of the tax and apply it from the date the law was enacted.
Second, the tax should be the responsibility of the shareholder who owes it, not the co-op board, and the city should not place a lien on the building to collect it. DOF already bills condominium owners directly and should do the same for co-ops.
Third, the law needs to account for a primary home that appears to be a second home in government records. When a family combines two side-by-side units, the city may still list them both separately, and a New Yorker renovating their apartment may temporarily live elsewhere. State law should allow owners to demonstrate through permits and board records that two units function as a single primary residence.
Fourth, the law needs to give homeowners enough time to challenge incorrect determinations. DOF has already extended the exemption deadline twice, yet the January 2027 payment deadline has not moved. The final corrected assessment roll is due on Dec. 31 and payment is due the next day, leaving co-ops one day to complete a 60- to 90-day process. The state should push the payment deadline to July 1, 2027.
Finally, the state should require the city to explain its tax determinations. Owners should know how DOF valued their property and why it believes it is not a primary residence. DOF should also use the cooperative and condominium tax abatement data it already holds, data it acknowledges as a primary residence indicator, to eliminate incorrect notices at no cost.
None of these changes would prevent the city from taxing second homes. They would simply ensure the tax reaches the people it was intended to reach, not New Yorkers who do not own second homes.
Wolfe is co-founder of Co-ops and Condos United of New York and owner of Wolfe Realty Services.