New York’s new tax on multimillion-dollar second homes has generated more questions than action so far, according to two brokers who spoke with Inman, with pricing and deal volume holding steady in the weeks since it passed.
The pied-à-terre tax was signed into New York’s state budget in late May, the product of a joint push by Gov. Kathy Hochul and NYC Mayor Zohran Mamdani. It applies to homes worth $5 million or more owned by people who do not live in New York City, and Hochul and Mamdani have projected it could generate $500 million a year.
A fiscal analysis found the tax would apply to roughly 11,200 properties after adjustments for market value, and projected net revenue between $340 million and $380 million after accounting for rented units and likely changes in owner behavior.
Brokers say clients are asking more questions but making few immediate moves.
Donald Brennan
“We’ve certainly had more conversations about the tax, but I wouldn’t say we’ve seen a wave of listings because of it,” said Donald Brennan, broker-owner of Engel & Völkers New York City, Brownstone Brooklyn, North Fork, Hoboken and Palm Beach. Buyers are asking about long-term carrying costs and whether the rules could change, Brennan said, but most owners are not making abrupt decisions.
Ben Jacobs and Jessica Chestler, co-founders of the Chestler Jacobs Team at Douglas Elliman, described a similar pattern among their clients.
“Most of our clients aren’t panicking; they’re gathering information,” Jacobs said. “The headlines have generated a lot of attention, but so far we’re seeing far more curiosity than urgency.”
Pricing in the segments the tax targets has not shifted, Brennan said. If the tax affects deals, he said, it will likely show up first in negotiations rather than asking prices, as buyers seek concessions to offset future carrying costs.
Ben Jacobs
Chestler said buyers are factoring future tax exposure into their underwriting without abandoning purchases. “People buy New York real estate for lifestyle, business, family and long-term investment reasons, and those motivations remain very much intact,” she said.
Secondary markets absorbing demand
Brennan said buyers who want proximity to New York without the added cost may look to markets like Hoboken and the North Fork rather than leaving the region entirely.
“I don’t think it’s an either-or decision between New York and everywhere else,” Brennan said. “It’s more about buyers expanding their options.”
Florida interest predates the tax
Both sources cautioned against tying New York-to-Florida migration directly to the new tax. Jacobs said Florida has drawn New York buyers for years because of taxes, climate and flexibility, and the pied-à-terre tax has become “another talking point” within that longer-running conversation rather than its cause.
Jessica Chestler
Chestler said buyers making a full move to Florida are increasingly establishing it as a primary residence rather than a seasonal property, a pattern she described as predating the tax.
What comes next
Both brokers pointed to fall as the point when the tax’s effect on behavior will become clearer, once owners have received notices and moved from asking questions to making decisions.
“The next few months will be much more telling than the last few weeks,” Brennan said.
Jacobs cautioned against reading too much into the current moment. “The market hasn’t had enough time to fully absorb the impact of the tax, and many of the predictions we’re hearing remain theoretical,” he said. “By the fall, we’ll have a much clearer picture of whether behavior has truly changed or whether the market has largely adapted.”
