If you own a high-end apartment or townhouse in New York City that isn’t your primary home, you may have opened a pied-à-terre tax notice this August and felt your stomach drop. You’re not alone. Between the sticker shock and a rollout that felt pretty bumpy, I’ve been fielding a lot of calls from owners trying to figure out their next move.
1. Sell Your Property Instead of Paying the Pied-à-Terre Tax
Some owners look at the new cost and decide it’s time to move on. That’s a legitimate choice, especially for people who were already thinking about their next chapter.
My take: be careful about making a rushed decision. Tax rules like this sometimes get revisited, and reforms could make it more manageable. If you’re selling because you’re ready, great. If you’re selling out of frustration, give it some thought first.
2. Pay the Tax and Carry On
Plenty of owners are choosing to simply pay it. They don’t love it, but they see it as the cost of keeping a home in New York. If the apartment is a place you use and enjoy, that math can still work.
3. Rent It Short-Term (Doesn’t Avoid the Tax)
Some owners are considering renting the place on shorter stays while keeping it for personal use. A few caveats:
- Many buildings don’t allow leases under a year. Check your building’s rules before anything else.
- Some condos permit leases as short as 30 days. It varies a lot by building.
- Townhouse owners usually have more flexibility.
Be clear-eyed about this one: short-term renting doesn’t get you out of the pied-à-terre tax. What it can do is generate income that helps offset the tax and your other carrying costs.
4. Rent Long-Term to Avoid the Pied-à-Terre Tax
If you’re not using the place as often as you expected, a long-term tenant who lives there full-time may be the most effective way to avoid the pied-à-terre tax entirely, as long as the exemption applies to your situation.
A few things to keep in mind:
- This works best for owners who aren’t using the property as much as they originally planned.
- REBNY has a lease rider designed for this scenario.
- Keep tenant financial records on file. They may be required when you file for the exemption with the city.
Which Option Is Right for You?
It depends on how often you use the place, what the property could rent for, your building’s rules, and where you want to be in a few years. There’s no single right answer, and the numbers matter more than the headlines.
Whether you’re leaning toward selling, renting, or keeping the property and paying the pied-à-terre tax, I’m happy to talk through it and run the numbers with you.
This content is for educational purposes only. Please consult your tax advisor and attorney for guidance specific to your situation.
