Worldwide: Property Taxes

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.

Recent tax developments include New York City's new property tax surcharge on high-value pied-à-terre homes and potential changes to IRS Form 1040 that would require disclosure of citizenship status and dual citizenship. These policy shifts reflect growing efforts to address tax equity in luxury real estate markets and enhance transparency in tax reporting for individuals with complex international ties.

Selling a Florida condo, an Arizona vacation home or a New York rental as a Canadian? Before the closing wires hit your account, the IRS may already have 15 percent of the gross sale price.

New York State's legislature is set to approve a groundbreaking annual tax on second homes in New York City valued over $5 million, marking a significant shift in how jurisdictions target wealth tied to real property. The pied-à-terre tax, expected to generate approximately $500 million annually starting July 1, 2026, will affect an estimated 10,000 properties owned by nonresidents who maintain luxury residences in the city.

A recent Sixth Circuit decision examines whether property owners are entitled to surplus proceeds when their homes are sold at tax foreclosure auctions for amounts exceeding the underlying tax debt. The case raises fundamental questions about how just compensation should be measured under the Fifth Amendment—specifically whether delinquent taxpayers should receive the fair market value of their property or merely the discounted auction price realized at a forced sale.

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