The NYC pied-à-terre surcharge is now part of the enacted state budget, approved May 28 and scheduled to begin July 1, 2026.

The bill's bracket structure is possible to estimate on any given apartment — and we've modeled it building by building, with the calculator reproducing the currently available math for specific units. What's less obvious from the headline rates is what the bill actually does to Manhattan pricing in aggregate.

Dozens of cliffs

For 1–3 family homes (townhouses), the cliff is sharp and clean: a $4.99M sale produces $0 surcharge; a $5M valuation produces $40,000 per year, $200,000 over the 5-year program window. Buyers and sellers will price around the $5M line the way they currently price around the mansion-tax thresholds.

For condos and co-ops, the first phase is messier. The trigger is not simply the sale price; it is tied to DOF's valuation methodology for Class 2 property. Because DOF market values for condos and co-ops can sit materially below actual sale value — especially in high-end buildings — the effective cliff may not correspond neatly to a $5M sale price. There isn't one cliff — there are dozens, effectively building by building.

Price compression

For a non-resident buyer to be neutral on an undiscounted 5-year basis, sale prices need to absorb 4.0% in the $5M–$15M band, 5.25% in $15M–$25M, and 6.5% above $25M. But primary-resident buyers don't pay, and they gain leverage at the same prices. My read: realized clearing-price compression lands closer to 2–4%. Wealthy primary residents may be the relative beneficiaries — they can buy with modestly better leverage and face thinner non-resident competition.

The cohort hit hardest

Under the Phase 2 framework, a $100M trophy condo could carry roughly $1.3M annually. For a true trophy buyer, that may represent a small percentage of net worth. Demand at this tier is less elastic; pricing is more likely to absorb the surcharge through negotiation friction and lower velocity than through a broad reset.

The genuinely affected cohort is the $5M–$15M tier of non-resident professional buyers — hedge fund and law firm partners, founders, family-office principals. Their pied-à-terre is a working tool, and the surcharge can add 20–40% to existing annual carry. This cohort substitutes — downmarket in Manhattan, to Miami, or to Greenwich — restructures (primary residence where practical), or compresses bids. The biggest volume drop and most visible realized price discount in the Manhattan luxury market over the next 18 months should come from this band — not from the trophy tier above it.

Phase 2 cliff at trophy buildings

The under-reported issue is Phase 2. The bill appears designed to move condos and co-ops from the temporary DOF-value framework toward a more standardized market-value framework by fiscal year 2028–2029. If that methodology converges closer to actual sale value, trophy buildings with very low Phase 1 DOF values could see the largest mid-program increase in the entire structure.

Many of the early numbers being circulated are Phase 1 figures. The real underwriting question is Phase 2. At buildings where Phase 1 DOF values sit far below actual market value, the Phase 2 bill could be a multiple of the initial exposure. Owners and prospective buyers should plan around the higher figure until DOF publishes the final methodology.

Run the numbers on your apartment: theroeblingteam.com/pied-a-terre-tax-calculator.

Two open questions move the picture meaningfully: the DOF revaluation methodology for tax year 2028-2029 (still unpublished) and the final exemption documentation rules. Both will determine how much of the bill's $500M annual revenue projection actually arrives versus how much converts into restructured ownership.

If you're weighing a Manhattan transaction in the affected tier, a 30-minute consultation gets you the read on what the bill means for the specific apartment you're considering.

Best,

Corey Cohen Principal, The Roebling Team at Compass c.cohen@compass.com · 646.939.7375