finance
New York Pied-à-Terre Tax Begins as Luxury Signings Rise but Overall Manhattan Sales Fall
The city's first tax on high-value second homes began July 1 and applies to non-primary residences above $5 million. Compass reported year-over-year gains in Manhattan contract activity for properties priced from $10 million upward during the second quarter. Officials project annual revenue between $340 million and $500 million.
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New York City's pied-à-terre tax took effect on July 1, applying to non-primary residences valued above $5 million. Compass data showed signings for Manhattan homes priced above $20 million rose 25 percent year-over-year in the second quarter. Signings in the $10 million to $20 million segment increased 38.6 percent, while contract activity for condos in that range climbed 54.5 percent.
Transactions for properties above $20 million rose 33.3 percent. Asking prices in the ultra-luxury category increased 13.9 percent year-over-year. Active listings across Manhattan fell 8.2 percent to 6,616 units, and new listings declined 13 percent overall, though new listings above $20 million rose 39.1 percent.
Overall Manhattan sales declined 3.5 percent year-over-year, yet contract signings increased 3 percent. Contract activity rose 24.5 percent in Lower Manhattan and 15.6 percent in Upper Manhattan. State and city officials estimated the tax will raise about $500 million annually from roughly 13,000 properties.
New York City Comptroller Mark Levine projected revenue between $340 million and $380 million per year. Compass broker Christine Miller Martin said recent IPOs and strong financial markets have put significant capital into the hands of luxury buyers. "At this level, buyers are seeking something rare—they're buying provenance and irreplaceability, not just square footage," Martin said.
