Worldwide: Property Taxes

New York City has begun notifying owners of high-value residential properties about a newly enacted annual surcharge on units not used as primary residences. While receipt of a notice doesn't automatically mean payment is required, it does impose response obligations on owners of second homes, investment properties, and trust-held residences. The surcharge faces active litigation, with courts currently permitting collection to proceed despite ongoing legal challenges.

A California Court of Appeal has invalidated San Francisco's Empty Homes Tax, ruling that the Ellis Act—which protects property owners' right to exit the rental market—also shields them from being forced to enter it through vacancy taxation. This landmark decision raises critical questions about the viability of similar residential vacancy taxes that other California municipalities have enacted or are considering as housing policy tools.

New York City's Pied-à-Terre Tax Law has created uncertainty for homeowners following the Department of Finance's adoption of final rules and mailing of thousands of surcharge notification letters. This comprehensive analysis examines the tax's application to residential properties, clarifies common scenarios involving trusts and business entities, and provides guidance on exemption qualifications and appeal procedures before the October 6, 2026 deadline.

Milbank LLP attorneys examine the implications of New York's pied-à-terre tax for common estate planning structures and situations, analyzing the basic mechanics of the surcharge and discussing key ambiguities in the statute. The article explores potential pitfalls that practitioners should consider when advising clients on property ownership and estate planning in New York.

New York City's pied-a-terre surcharge has sparked litigation that temporarily paused the program before being reinstated on appeal. Property owners who received tax notices should understand their exemption filing obligations and the September 18, 2026 deadline, regardless of ongoing legal challenges.

Twelve Long Island school districts exceeded New York State's legal limit on unrestricted cash reserves during the 2025-26 school year, holding nearly $3.64 billion collectively. While administrators defend these reserves as prudent financial planning against inflation and unexpected costs, taxpayers question whether excess funds should instead be applied to reduce their substantial property tax burdens, which already see school taxes comprising more than half of homeowners' total property tax bills.

State and local governments are increasingly targeting second homes with new taxes to boost revenue and address housing shortages, with creative legislation like Rhode Island's "Taylor Swift tax" and New York's "Pied-a-terre tax" leading the charge.

New York has introduced a surcharge on high-value residential properties in New York City that are not used as primary residences, effective July 1, 2026.

New York City's newly enacted pied-à-terre tax introduces significant compliance obligations for owners of high-value non-primary residences and cooperative boards beginning July 2026. The tax applies to properties valued at $5 million or more for single-family homes and $1 million or more for co-ops and condos, with rates varying based on property type and assessed value.