New York City has begun alerting pied-à-terre owners about a potential surcharge, marking the first step toward implementing the city’s new tax on non-primary luxury homes. Mayor Zohran Mamdani and Department of Finance (DOF) Commissioner Richard Lee this week announced that the city has started notifying property owners by mail that they may be subject to the new tax. The annual tax, approved in May, applies to one- to three-family homes, condominiums, and co-ops valued at $5 million or more whose owners maintain a separate primary residence.

“When I came into office, I made clear that our City would need long-term solutions to our city’s long-term fiscal challenges,” Mamdani said. “On Tax Day earlier this year, I promised that we would tax the rich, and with our new pied-à-terre tax, that is exactly what we have done.”

“Today is the first step in implementing this tax and collecting critical revenue to fund our parks, schools and libraries. We will diligently implement this law and ensure that we collect what working New Yorkers—and this city—deserve.”

For property tax years 2026-2027 and 2027-2028, the surcharge will apply as follows:

First proposed by Gov. Kathy Hochul in April, the tax fulfills one of Mamdani’s key campaign pledges to raise taxes on wealthy New Yorkers. The governor said the surcharge could generate at least $500 million in annual city revenue. The reversal came as the city grappled with a multibillion-dollar budget gap.

An April report from city Comptroller Mark Levine found that the tax could generate up to $500 million annually, but several factors could reduce the final revenue. The comptroller’s analysis identified several factors, including exemptions for rented units and “behavioral responses” to the tax, that could reduce annual revenue to between $340 million and $380 million.

With notices now going out to owners, along with a new dedicated city website detailing guidelines and exemptions, the tax is moving forward.

The DOF site features frequently asked questions, an eligibility tool, detailed guidance, and instructions for submitting documentation.

According to Bloomberg, the city will notify pied-à-terre owners in a letter what they owe by August 30. The appeal period for owners to contest the tax will be just 30 days.

The Mamdani administration has also funded 13 new positions within DOF to administer the program and assist property owners, along with 11 additional positions at the Office of Administrative Tax Appeals to handle administration of the surcharge.

Additionally, DOF has prepared extensive resources to help property owners navigate the surcharge and appeals process. Customer service representatives and 311 operators have been trained to answer questions, while a secure online account allows owners to protect sensitive information, upload documentation, and track their submissions.

The department has also created a dedicated team to review inquiries and supporting documents, along with specially trained staff to handle complex or unique cases. Internal review procedures have also been established to ensure determinations are made consistently.

“The Mamdani administration and DOF are committed to implementing the new non-primary residence property surcharge fairly and efficiently,” Lee said. “As implementation continues, we will ensure the process is carried out transparently and with careful consideration at every step.”

More information about the pied-à-terre tax, including eligibility requirements, documentation instructions, and how to file an appeal, can be found here.

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• NYC pied-à-terre tax could raise less than Hochul’s $500M estimate, report finds

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