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New York Weighs 1% Cash-Deal Levy and Two-Phase Pied-à-Terre Tax in Late Budget Talks

Lawmakers are weighing targeted real estate surcharges to raise hundreds of millions for the city's shortfall.

Overview

  • State leaders, following Thursday’s disclosures, outlined a roughly 1% surcharge on New York City homes sold for $1 million or more when bought with cash, with an estimate of about $160 million in annual revenue.
  • The governor detailed a pied-à-terre plan for non‑primary residences that starts with one‑to‑three family homes assessed at $5 million or more paying 0.8% to 1.3% each year.
  • Condos and co‑ops would face an interim 4% to 6.5% annual charge for two years using today’s assessed “market value,” then shift to a sales‑based system once the city builds new valuation rules.
  • Hochul’s office projects about $500 million a year from the second‑home surcharge affecting roughly 8,000 to 10,000 properties, though the city comptroller has warned the haul could be lower.
  • Real estate groups argue the measures would slow deals and deter investment, while the late $268 billion state budget still needs final votes next week and neither proposal has become law.