Issue 123 – The NYC Pied-à-Terre Tax and its Implications on the Real Estate Market

Lately, we have been hearing the slogan “Tax the Rich” frequently. This is often espoused in reference to the newly implemented pied-à-terre tax in NYC.

It implies the rich aren’t paying taxes. The reality is quite different. Yes, there are some very wealthy people who pay far less in taxes than others earning the same or similar amounts. But New York City taxpayers pay the most local taxes in all of the U.S. The laws that need to be addressed are federal ones, not local. The loopholes touted are affecting just a select few, when in reality most high-net-worth folks are indeed paying a lot of taxes — especially New Yorkers, who pay $21 billion more to the state every year than the state spends on NYC.

The latest controversy stems from New York City’s enactment of a pied-à-terre tax—an annual surcharge on high-value homes that are not used as a primary residence. If you own a luxury second home in the city, you may now have a recurring tax exposure on top of other friction costs. The tax is also an annual recurring fee, not a one-time hit like the mansion or transfer tax, which makes it more pervasive.

According to a recent report by the NYC Comptroller, the legislation is expected to phase in from July 1, 2026, through June 30, 2028 (fiscal years 2026—2028), with the first phase focused on city “market value” thresholds. Early reporting indicates that the tax applies broadly to high-end second homes and provides different treatment for single-family homes versus co-ops and condos. For houses valued at roughly $5 million or more, the surcharge has been reported at 0.8%–1.3%. For co-ops and condos, the initial phase appears tied to Department of Finance values starting around $1 million, which can translate into a much higher market sale price.

I am seeing a lot of confusion about how this will be implemented. Essentially, people believe that any sales price over $5 million will be affected, when in fact Phase 1 will be based on land value, not the transactional equivalent sale price. For example, a property valued at $844,000 may not be captured by the pied-à-terre tax. It’s less than $1 million and nowhere near $5 million.

However, Phase 2 (for fiscal years 2028–2031, beginning July 1, 2028) becomes a much more speculative concern. Early indications suggest that the tax will be based on the more transactional side of things. It may even work on factoring a five-year average; we simply don’t know yet.

Some savvy buyers are trying to close before Phase 1 starts. Others are trying to keep their price below $5 million and then essentially work any credits as a side agreement to avoid the potential second-phase hit.

As Business Insider reported, “In its first two years, the tax will rely on Department of Finance ‘assessed values’ to determine which homes will face a new charge, while the city and state work out a new valuation system.”

Likewise, a recent CNBC segment details: “Billionaire and Citadel CEO Ken Griffin became the face of the tax after New York City Mayor Zohran Mamdani posted a video in front of Griffin’s penthouse apartment announcing the tax.”

I believe the pied-à-terre tax punishes people who use our services less than full-time residents. They also pay massive transfer and mansion taxes and typically don’t use our schools — a huge portion of real estate tax revenues.

My view is that this will not destroy the New York market, but it will absolutely change behavior at the margins. Buyers are already more sensitive to carrying costs, monthly common charges, assessments, the mansion tax, financing costs, and now an additional annual second-home tax. The psychological impact may be just as important as the financial one.

The highest end of the market will feel this first. For discretionary buyers, especially those comparing NYC to Palm Beach, Miami, Aspen, London, or other global luxury markets, this becomes another line item in the decision-making process. It may not stop a true New York buyer, but it may slow them down, sharpen their negotiations, or push them toward renting instead of buying.

As a result, I expect high-end rentals to benefit. A buyer who wants a New York City presence but does not want the tax complexity may choose to rent a trophy apartment instead. That could strengthen demand for luxury rentals, especially furnished, turnkey, white-glove inventory.

For co-ops, the impact may be more nuanced. Co-ops already have a smaller buyer pool because of board scrutiny, financing restrictions, and liquidity requirements. If the tax makes second-home buyers more cautious, certain high-end co-ops may feel additional pressure, especially those with significant monthly maintenance or less flexible sublet policies. That said, as I always point out, the very best buildings with scarcity, provenance, service, and location will still hold value.

I have not yet seen a wave of people selling solely because of this tax, but I have absolutely seen buyers pause, ask sharper questions, and reconsider the total cost of ownership. The conversation has shifted from “What is the purchase price?” to “What is my all-in annual exposure?”

Other markets have tried versions of second-home or vacancy-style taxes, with mixed results. In some places, they created revenue and pushed underused housing back into circulation. In others, they caused buyers to become more cautious or redirected capital elsewhere. New York is different because it remains New York — but the city cannot assume that capital is captive.

Again, citing Business Insider, “Hochul and Mamdani estimated the tax could raise $500 million.”

So, are there any benefits? Potentially. If the revenue is used responsibly, it could support city services and housing priorities. It may also create a clearer distinction between end-user demand and purely discretionary ownership. But from a market perspective, the risk is that it adds friction at a time when the luxury buyer is already highly selective.

My advice to second-home buyers is simple: do not overreact, but underwrite carefully. Understand whether the property will be classified as a primary residence or pied-à-terre. Review the building’s carrying costs, taxes, assessments, liquidity requirements, and resale profile. Buy quality, buy scarcity, and buy something you would be comfortable owning through a softer market.

It’s important to keep all in perspective: Mayors come and go, and when you start impacting the very hands that feed you in one of the most capitalistic cities that ripple through the nation, I think we stand the test of time on how we are going to navigate this.

The New York City buyer is not disappearing. But the casual, optional buyer now has one more reason to pause — and in this market, that matters.

Issue 126 – Who Owns the Listing?

New York real estate is quietly becoming a battle for access, and most consumers don’t even realize the rules are changing.

The most important battle may no longer be who gets the listing — it may be who gets to see it. For most of my career, a listing broker’s job has been straightforward: create demand, tell the property’s story, expose it to the right buyers, negotiate expertly, and ultimately get the best possible outcome for the seller. Now a fundamental element of that role is shifting — access itself.

That does not mean private listings are inherently problematic, or even new. I’ve sold properties quietly myself. Sometimes discretion is necessary—for privacy reasons, security concerns, divorce proceedings, an occupied home, or to test a pricing strategy.

But what was once the exception is becoming more the norm.

As of August 12, Marketproof identified 440 Manhattan properties being offered as ‘Participant Only’ listings, representing approximately $1.94 billion in asking volume. Of this total, 47 new Participant Only listings were added in June, 144 in July, and 153 in just the first 12 days of August.

This isn’t just a trophy-market phenomenon. Marketproof found that nearly 30% of those listings were asking under $1 million. And The Real Deal’s recent analysis points in the same direction, reporting a 30% increase in off-market residential sales volume across Manhattan, Brooklyn, and Queens in 2025.

Put those numbers together, and it becomes difficult to dismiss private real estate as merely the world of whisper listings and ultra-high-net-worth sellers. Private marketing is becoming mainstream, which deserves a closer look. We need to ascertain who benefits.

So, who owns the listing? Legally, the answer is obvious — the seller owns the property. In practice, the picture is more nuanced. Listings have become valuable currency: they attract buyers, who generate data and relationships. And those relationships lead to transactions that create market share and leverage.

Perhaps we should be asking a different question: When did exclusivity stop meaning the right to represent a property and start meaning the right to restrict who sees it?

The seller wants the best possible combination of price, privacy, certainty, and timing. The broker wants to represent the seller successfully, protect the relationship, and complete the transaction. The brokerage or platform has another economic interest: inventory. Listings attract consumers, engagement, data, and future business. None of these interests is inherently improper. But when they diverge, we need to be very clear about whose interest comes first.

For me, the seller has to be the North Star. That is where the debate becomes complicated.

StreetEasy has argued that the growth of private listings creates artificial scarcity and gatekeeping. Supporters of private marketing argue that sellers should have the right to decide how — and how publicly — their homes are marketed.

I understand both arguments. But I keep coming back to one question: Does restricting exposure actually create a better outcome for the seller? If it does, show me.

The early data is fascinating, partly because it doesn’t give us a definitive answer. Marketproof found that 78% of the Participant Only listings it analyzed had previously been publicly marketed. Of those Participant Only listings that came off the market without selling, roughly one-third subsequently returned to the public market. Additionally, those relistings came back at a median asking price 6.4% below their Participant Only asking price, according to Marketproof. While interesting, it doesn’t prove that private marketing is ineffective.

There aren’t enough matched transactions yet to determine whether comparable privately marketed properties ultimately sell for more or less than publicly marketed ones. That’s precisely why I think the industry should be careful about declaring victory on either side.

Real estate value is established through imperfect but important information: comparable transactions, current competition, buyer behavior, and ultimately what someone is willing to pay. Exposure is part of that price-discovery mechanism, but it doesn’t mean maximum exposure always produces maximum price.

Scarcity can create urgency. A sophisticated broker may know exactly which handful of buyers are right for a particular property. However, we need to be careful not to confuse controlled exposure with manufactured scarcity.

Another reason this conversation matters now: Consolidation is changing the brokerage business. Large firms can offer extraordinary advantages — technology, referral networks, data, marketing resources, and access to enormous numbers of agents and consumers. Scale itself isn’t the problem, But when scale is combined with proprietary inventory, the competitive equation changes.

For years, technology moved residential real estate toward greater transparency. Consumers gained access to listings, price histories, comparable sales, building information, and market data that once largely resided with brokers. That disrupted our industry, but I think it made good brokers more valuable — not less. A great broker shouldn’t be afraid of this transparency.

Our value is actually understanding the information. It’s knowing why one apartment deserves $2,000 per square foot while another in the same building doesn’t. It’s knowing when to walk away from a bidding war, how to position an unusual property, how to navigate a board, how to structure a complicated deal —  and how to tell a seller something they may not want to hear.

None of this means every property should automatically be marketed publicly. But as a broker, my responsibility is making sure the seller understands the nuance.

Whenever an industry undergoes structural change, I find it useful to ask one simple question: Who benefits? And I always circle back to the ultimate one: What will produce the best outcome for my client?

Before New York embraces a fundamentally different marketplace, we should demand enough transparency to know, because the future of residential brokerage shouldn’t be decided solely by which company has the largest network or which website has the largest audience.

None of us should confuse access to the listing with ownership of the client’s interests.

So, if private marketing creates greater value for sellers, let’s prove it. If an open marketplace creates greater value, let’s prove that too. If the answer depends upon the particular seller and property, let’s have the sophistication to say so.

Because ultimately, the most important question isn’t whether a listing is public or private; it’s whether restricting access creates value for the seller — or just value for the company controlling the access. Those are not the same thing.

And right now, New York real estate needs to understand the difference.

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