The Tax Aimed at Penthouses Is Landing on Bayside
New York City's pied-à-terre tax was designed to extract revenue from wealthy second-home owners who park capital in the city without living there full-time. The city's Department of Finance had a different idea in practice: it released a supplemental assessment file listing over 680,000 New York properties that could theoretically fall under the new surcharge.
The unfiltered dataset swept in far more than Park Avenue penthouses. It caught modest single-family homes in Staten Island, row houses in Bayside, and properties whose owners had no idea their name, address, and assessed value were sitting in a publicly searchable file. Many still don't know.
Middle-Class Owners Forced Into Conversations the Wealthy Had Years Ago
'The wealthy and the ultra-high-net-worth have been in this game for a long time,' said Myles Fischer, a partner who co-leads the Trusts and Estates practice group at Harris Beach Murtha. 'The rest are sort of catching up.'
That catch-up is not cheap. Middle-class and blue-collar homeowners are, in Fischer's words, 'being forced into a situation where they have to sit down with lawyers' — at hourly rates — for planning advice that families with means secured years ago. His point is blunt: 'It's not that you have to be a rich person to have something worth protecting.'
Fischer describes one Staten Island homeowner whose property appears on Mamdani's list. In that owner's mind, they are not wealthy. But they hold a million-dollar house that is likely five times their other assets. 'It's quite perverse,' he said.
For context: the median price to buy a cooperative in Manhattan is $850,000 and to buy a condo is $1.75 million, netting out to $1.225 million combined — figures that illustrate how broadly 'high-value property' is defined in New York.
LLCs and Trusts: Four Reasons That Apply Across Income Levels
Fischer identifies four core reasons homeowners at every income level use LLCs and trusts: limiting liability, organizing assets, avoiding probate, and mitigating taxes. The liability argument is the most fundamental. If a property sits inside an LLC or trust and someone slips and falls on it, 'the only thing that's subject to that lawsuit would be the assets inside that LLC or trust,' Fischer said. Personal savings, retirement accounts, and other real estate stay out of reach — provided the entity is properly maintained and not treated 'like a piggy bank.'
Privacy is the door, Fischer says. Estate planning is what's behind it.
One Critical Limit: The City Is Looking Through
Before anyone rushes to restructure, Denisse Moderski, a state and local tax partner at PKF O'Connor Davies, flags an important constraint. Moving a property into an LLC or trust does not automatically remove an owner from the pied-à-terre surcharge. 'Even with a trust, the city has come out that they are applying a look-through,' she told Fortune. The transfer may shift title, but the city retains the right to examine what lies behind the entity.
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The numbers come first: over 680,000 properties flagged, a public dataset that doubles as a doxxing list, and middle-class families now paying estate-planning lawyers to defend assets the government just made visible. This is what happens when a tax designed to punish wealth is drafted broadly enough to catch everyone beneath it.
The deeper principle is older than Gracie Mansion. When the administrative state expands its reach — even with a populist rationale — it is the working homeowner who bears the compliance cost, while the truly wealthy, who have had counsel on retainer for decades, simply update their LLCs. Capital rewards clear rules. Ambiguous ones reward only the lawyers.
