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How the Pied-à-Terre Tax Could
Reshape the Fall Market Forever
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Here are the takeaways from the following:
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January 5th is the critical deadline: Pied-à-terre owners who do not close before the annual assessment date could face another year of substantial non-primary-residence surcharge costs.
- Closing in time may be difficult: Co-op board approvals, lender requirements, managing-agent coordination, and holiday slowdowns mean sellers need to act well before the fall contract season.
- A potential buyer opportunity: More deadline-driven listings and motivated sellers could raise secondary-home inventory and put downward pressure on prices—creating favorable conditions for well-positioned buyers.
- Click the above image to hear my thoughts.
Since August is one of the slowest times of the year, I wanted to take a moment to discuss the potential forever-impact of the “Pied-à-Terre Tax” (PAT) on our Fall market. Sorry, it’s not the PAT, it’s actually the “City ‘Surcharge’ on Property That Does Not Serve as a Primary Residence.”….tax. Yes, there’s a myriad of issues to discuss about this topic, but its effect on the Fall market is what I want to focus on. History has shown us that deadline-driven taxes and regulations create a rush to transact before they take effect.
We saw it before July 1, 2019, when New York State increased the transfer taxes and introduced a progressive mansion-tax. As a result, buyers rushed to close before the new fees applied. More recently, rental activity surged ahead of the June 11, 2025 implementation of the FARE Act, which barred landlords from requiring tenants to pay fees for landlord-hired brokers. Renters feared landlords would build those costs into base rents…and, unsurprisingly, rents have since reached record highs while vacancy sits at just 1.49%. But that’s a conversation for another day.
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Monthly Contract Activity
for any bedroom configuration in All Manhattan priced $5M+
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Activity has fallen -34.4% from the past month,
whereas the rolling seasonal average would be typically be -23.2%.
| | Chart courtesy: UrbanDigs | | |
Now, we have January 5th. This will be the critical annual date for determining a property’s exposure to the new surcharge. It is an arbitrary annual test date used to determine a property’s usage, whether primary or secondary. And note, the bills are meaningful. I have clients facing charges of $40,000 and others as high as $220,000 per year.
Interestingly, although the announcement that the tax had passed was back in April, the secondary-home market continued, for the most part, as business as usual. Deal volume was substantial. But, as I predicted, the backlash wouldn’t be felt until the actual bills arrived in the mail and we had owners saying, “Wait…I owe what?” Sure enough, deal activity in this segment has slowed considerably; that said, August seasonality is certainly a factor.
The question is, will owners of pied-a-terres valued above $5 million simply absorb the new costs? Some will. But others won’t…and may decide to cut the cord. For sellers hoping to avoid another year of the surcharge, securing a buyer is not enough. They must actually close before January 5th. Miss that date, and another annual charge may be assessed to the property. Note, it’s a fee charged to the property, not the individual. So again, if that date is missed, that expense will need to be absorbed by the seller…or negotiated with the buyer.
And this is not middle-America; it’s New York City, where we have coops…lots of them. Co-ops account for more than 60% of our housing stock and require board approval; this takes a minimum of 60 to 90 days. Sellers therefore need to secure buyers well in advance of January 5th if they hope to close in time.
This is where I see potential pain ahead. Consider this: A seller finds a buyer by mid-October, a time when most contracts are signed in this cycle. Seems plausible and the seller probably feels pretty good at this point…but that’s already late. The parties have a compressed timeline with which to navigate a co-op board package, manage a review process, obtain a board interview, get approved, satisfy all the lender requirements, coordinate attorneys, managing agent and all the plethora of other closing logistics…all during the busiest holiday period of the year. Imagine, managing agents will likely be facing a higher volume of time-sensitive transactions. Board members will be distracted with the holidays, travel, and year-end commitments. Even scheduling a board interview could become all too elusive. I would say that getting an interview in December would be an overwhelming success, but that’s not guaranteed.
| Click the above image to see the Real Estate Board of New York's worksheet on the "tax". | |
So if an owner obtains board approval by mid-to-late December, they have a chance to secure a closing prior to January 5th. But again, there will be many people shooting to beat that same date and get on the Managing Agent’s calendar, during a period in late December when virtually nothing gets done. Coordinating the managing agent, attorneys, lenders, buyers, sellers, and ironing out all building requirements before January 5th will not be easy. Stressful?...YES! And this year, January 5th falls on the second business day back for many people. And this scenario is assuming the seller has a buyer by mid-October. If you are a pied-à-terre owner who wants to avoid another year of this surcharge, the time to act is now.
Another caveat for this particular Fall must be noted; there are two additional factors which will compress this time frame even further. 1) September is notoriously the slowest month of the year and it always takes several weeks for people to get settled in with back-to-school and the like. This year, Labor Day is as late in the calendar as possible (on the 7th), which will delay activity even more. 2) The Jewish Holidays (Rosh Hashanah and Yom Kippur) always create a hiccup in the market momentum in the Fall. This year, they commence the immediate following weekend after Labor Day. This may very well serve to even further kick back the “real” start of the Fall market. Be sure to price right….and well…happy selling.
The larger question is what this could do to the market. If owners rush to list, we could see a meaningful increase in inventory for secondary-homes. More supply, coupled with highly motivated sellers trying to beat a hard deadline, could put downward pressure on prices/values; this could potentially be a 5% to 10% downward move for this segment.
And because January 5th is an annual trigger, the rush to beat it could become an annual event.
For sellers inclined to avoid that surcharge and move on from a secondary residence, acting sooner rather than later is advised. For buyers, however, this could create a compelling opportunity…particularly for those looking to upgrade into a primary home.
Which leads me to what I always say:
| | Anyone interested in buying or selling, should be rolling up their sleeves to determine whether the time is right to sell or if there's a home/investment property out there for them. Who represents you matters…your best investment is often in the broker you choose; find someone with experience, who you feel you can trust. | | The Dakota is the crown jewel among the most extraordinary residences of Central Park West. It's the most storied residential building in New York's long history. The late 1870s was a time of burgeoning prosperity. A post-war boom saw the proliferation of Mansion and Townhouse living for the affluent; it was a representation of status. It was then that Edward Cabot Clark, architect of the Singer Sewing Machine Company fortune, conceived of an apartment house to be built, as an alternative, for precisely those affluent who preferred not manage the responsibilities of caring for a house. His vision was to preserve the aspirational and distinctive way of life characterized by sophistication, exquisite taste, privacy, pleasure and service for those accustomed. This was to be a house of a different kind. Click here to see the full listing details. | | One of the select-few truly exclusive and distinguished boutique cooperatives on all of Park Avenue..."all limestone, with double sets of Florentine-style windows and with only one five-bedroom apartment per floor"...nearly 70 feet of frontage facing Park Avenue...extraordinary volume...10’ ceilings…innumerable, large outward facing windows...four exposures...views and streams of sun and light throughout...private elevator landing and 375 sqft entry gallery, perfect for art...SE facing living room...oversized dining room...south facing library...an unusual and seductive corridor, 7 feet wide and nearly 48 feet long, perfect for art…commodious primary bedroom suite...and what was once described as a home with “six servants’ rooms, including a separate section for the butler and the second man” is now is currently 15 rooms, inclusive of 5 bedrooms, 6 bathrooms and two staff rooms...unparalleled location, in close proximity to world class restaurants, shopping, entertainment, art and culture, including the Metropolitan Museum of Art, The Frick Collection, Lincoln Center…this list goes on...Click here to see the video and more. | | * MANHATTAN MARKET NEWS * | | |
• The scarcity of available homes below $3 million helped bring the total number of sales down 21% compared to a year ago.
• With fewer closings on the lower end of the market, the average price rose 12% from 2025’s second quarter.
• The median price posted an even larger increase, rising 32% over the past year to $2,500,000.
• Prices for homes sold in the second quarter of 2026 totaled $1.45 billion, 12% less than a year ago. This drop is solely due to the decline in the number of sales.
The Full Hamptons Q2 Report
| | * WHAT REPRESENTATION LOOKS LIKE * | | |
Click on each respective image to watch the video.
| | Above charts courtesy: Mortgage News Daily | | * MOST RECENT MARKET REPORTS * | | It was an honor to have been invited to and participate on a panel at this years SIMED conference in Malaga, Spain. We discussed the global future of luxury...the trends and the must-have experiences demanded by the ever-growing international buyer population. Centrally located on the global map with an average of 300 days of sun annually, there are many extraordinary opportunities in this region of Andalucia, which include Marbella and Estepona. Reach out to me if you would like to learn more; we can discuss your interests, goals and specific needs. Click here to see an impressive presentation on Malaga City's growth. | |
The most anticipated art exhibits coming to Manhattan this Fall
| | Manhattan’s strongest fall 2026 lineup looks particularly good for contemporary art, postwar American art, photography/new media, and design. The most consequential openings are likely Arthur Jafa at the New Museum, Lee Krasner and Jackson Pollock at the Met, and Taryn Simon at the Guggenheim. | | Let's Compare Lists: Eater vs. Resy | |
The Hottest Restaurants
Open Right Now
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Eater's Heat Map (click below) - Some of the Hottest Restaurants open right now. This list will be updated monthly.
Eater editors get asked one question more than any other: Where should I eat right now? Here, we’ve put together a map of the latest Manhattan debuts drawing NYC’s dining obsessives.
New to the list in August: We’ve added Chelsea Thai restaurant Hungry Spicy; Japanese izakaya Noury; Argentinian import Graciela; and Jungsik Yim’s Muje. And, for now, we swapped out Sotheby’s restaurant Marcel, East Village sandwich shop Sanwits, and Soba Ulala.
For more New York dining recommendations, check out the new hotspots in Brooklyn and Queens.
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Hit List: Where In New York You’ll Want to Eat Right Now
| | Photo courtesy of Yakiniku Great | | |
New to the Hit List (August 2026):
New to The Hit List on Resy
Make the Most of Those Summer Fridays: You’ve only got a few more Summer Fridays left, so now’s the time to make them count. Might we suggest getting the weekend started a bit earlier with a leisurely lunch at Yellow Rose? Or how about heading to Frijoleros for happy hour, or to Quique Crudo for an early dinner? Spend golden hour with an impeccable view from Bar Blondeau, or with a bottle of wine over at Popina. More recs here.
For the full list...keep reading here.
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ARE RESTAURANTS SPYING ON YOU?
Is it a restaurant
. . . or is it the CIA?
The show Cheers got it right: we all like to go where everybody knows our name. But how much more do we want our favorite restaurant to know about us? Read Article.
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Cookbook Author, Culinary Journalist and Food Humorist©, Rob is a Manhattan born man-about- town who writes, produces and hosts programs about food. I highly recommend his new book for Dads like myself. There is a new kind of dad, and he's doing far more domestic duty than at any time in history, including cooking. Although it's written with a sense of humor, this book is a serious resource for dads and anyone else interested in upping their game to make great tasting foo d bat home, even if they have never used a chef's knife or a roasting pan before.
Order: Short Order Dad ...A Great Gift for Dad!
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Rob is also on iHeart Radio & SPOTIFY with his ALL YOU CAN EAT podcast about delicious food, cooking and luxury travel.
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PRIVATE ONLINE COOKING CLASSES:
Ask Rob about his privates…by which he means that he offers customized cooking lessons to individuals and to groups. You learn, you laugh, and you eat well.
Now that ALL of us need to pitch in when it comes to feeding the family, I suggest picking up some serious tips from Rob. As he says, he went to cooking school so you don't have to. These sessions are fun and literally provide prized skills for upping your game. Enjoy. See Rob's intro here.
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| | | Disclaimer: The opinions and content in this newsletter are assembled solely by Roberto Cabrera (a licensed real estate broker in New York State) for informational purposes only and and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No financial or legal advice provided. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. All Coming Soon listings in NYC are simultaneously syndicated to the REBNY RLS. Equal Housing Opportunity. Everyone has unique circumstances and should consult the their own respective professionals. |
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