If you own a second home in New York City, or you’ve been thinking about buying one, there’s a new proposal on the table that deserves your attention. A surtax on second homes is moving through the conversation in Albany and City Hall, and whether it passes as written or gets modified along the way, the market is already responding to it.

Here’s what the current proposal looks like and what it could mean for you.

What Is the NYC Second Home Surtax? The proposal creates a tiered annual surtax on second homes based on assessed value. The rates break down like this:

• Assessed value between $1M and $3M: 4% annual surtax
• Assessed value between $3M and $5M: 5.25% annual surtax
• Assessed value above $5M: 6.5% annual surtax

These charges stack on top of your existing property taxes and would take effect in the 2026 to 2027 tax year.

How Does NYC Property Assessment Affect What You Actually Owe? Here is where it gets nuanced, and this part matters. New York City’s property assessment system is notoriously outdated. The city tends to value properties at a fraction of their true market value, sometimes 10% or less. That gap softens the real-world financial impact considerably. A property worth $4 million on the open market might be assessed at far less, which changes the math on what tier you actually fall into and what you’d owe.

That said, this is still a new recurring cost. And any new recurring cost on a property you’re holding, or considering buying, is worth running the numbers on.

How Is the NYC Real Estate Market Responding? This is where it gets interesting. In the weeks after the proposal was announced, contracts on apartments priced at $10 million or more surged 80%. Buyers rushed to close before the rules could change. At the same time, some sellers in the $30 million to $40 million range have quietly pulled back, choosing to wait and see how the dust settles before making a move.

That tension creates real opportunity. There are motivated sellers in the market right now who simply were not there six months ago. The urgency that drove the buyer surge has not equally driven sellers, and that imbalance is worth paying attention to.

What Should NYC Property Owners Do Right Now? If you currently hold a second property in New York City, now is a good time to take a fresh look at your assessed value, understand which tier you’d fall into under the current proposal, and think about whether your long-term plans for that property still make sense under a new cost structure.

If you’ve had your eye on something and have been waiting for the right moment, the motivated sellers who are in the market right now represent a window that may not stay open long.

Either way, this is worth a conversation. I work with buyers and sellers across Brooklyn and NYC every day and I’m tracking how this proposal is moving and what it means at the neighborhood level. Reach out and let’s talk through where you stand.