Albany Floated Mansion Tax Changes in 2026. The Final Budget Taxed Second Homes Instead
A mailing, a mayor’s post on X, and nearly 14 million views by the following Friday: that is how New York City’s new tax on second homes reached a national audience in July 2026. The post, published July 23, told owners of city homes worth more than $5 million to “check your mailbox,” and the Staten Island Advance reported that it drew about 20,000 comments.
Lost in the noise was the older tax that Long Island buyers actually meet at the closing table. It did not change. The state’s mansion tax still adds 1 percent to the price of a residence at $1 million or more, and the buyer pays it. The seller’s base transfer tax still runs $2 for every $500. The mechanics have their own guide in New York’s Mansion Tax on Long Island, so this post follows something different: what Albany debated during the 2026 budget, what it left alone, and where the court fight over its replacement stood on October 9, 2026.
How the Year Unfolded
The sequence matters because several headlines blur two different taxes. One is the mansion tax, a one-time charge at a sale. The other is the pied-à-terre surcharge, an annual charge on certain New York City homes that are not the owner’s primary residence.
| Date (2026) | What happened | Source |
|---|---|---|
| March 10 | The State Senate’s budget resolution lists a “City Mansion Tax and supplemental tax on the transfer for residential property with a value of over $5m” among its New York City revenue items, estimated at $321 million. | NY State Senate |
| April 15 | Gov. Kathy Hochul proposes an annual surcharge on New York City second homes valued over $5 million. | Governor’s office |
| May 7 | A $268 billion budget framework that includes the pied-à-terre tax is announced; details are still unsettled, and the comptroller’s revenue estimate runs below the state’s. | The Real Deal |
| May 28 | The FY2027 budget is signed without changes to the mansion tax, according to one brokerage’s review. | Realty Collective |
| July 1 | The surcharge takes effect. | Fortune |
| July 23 | New York City mails notification letters, and the mayor’s post announcing them reaches nearly 14 million views by the next day. | CPA Practice Advisor |
| September 28 | Wilbur Ross, his wife, and Steve Wynn sue the state, arguing the tax is unconstitutional because it applies only to people who do not live in the city. | Fortune |
| September 29 | A Staten Island judge orders the city to cancel its notices and restart the process. The city says it will appeal. | ABC7 New York |
A caution on sources: accounts of exactly which mansion-tax changes lawmakers considered differ from outlet to outlet, and several details circulated in the trade press could not be matched to a primary document. The Senate’s own release, linked above, is the firmest record of the March proposal. For the final outcome, Realty Collective’s September review put it plainly: “The mansion tax remains the same as it was in 2019.” The Tax Department’s current page, covered below, is the place to confirm rates before a contract is signed.
The Video Behind the Proposal
The pied-à-terre idea reached the public on April 15, when the Governor announced it at a press event that was streamed on YouTube. The official recording is below.
The Governor framed the measure narrowly. “This is a targeted surcharge on second homes and investor-owned apartments worth over $5 million,” she said, according to the transcript her office posted. She added a boundary of her own: “I will not consider income taxes on New York City residents nor corporate taxes on New York businesses.”
What a Long Island Closing Still Looks Like
The surcharge belongs to New York City. Nothing in it changes how a house in Nassau or Suffolk County closes, and the Tax Department’s page on real property transfer taxes still describes the same structure that has applied for years.
- The base transfer tax is “two dollars for each $500, or fractional part thereof,” and the seller pays it.
- The additional tax on residences is 1 percent of the sale price once consideration reaches $1 million, and the buyer pays it. If the buyer does not pay or is exempt, the seller becomes responsible.
- Form TP-584 is due no later than the fifteenth day after the deed is delivered. Outside the city, it is filed with the county clerk where the property sits.
- The city’s own layers, a residential base tax at $3 million and a buyer-paid supplemental tax starting at $2 million, apply to conveyances in the five boroughs.
The 1 percent applies to the whole price, not just the dollars above the line. The figures below come straight from those published rates; actual bills depend on how consideration is determined in a given transaction.
| Sale price | Mansion tax (buyer, 1%) | Base transfer tax (seller, $2 per $500) |
|---|---|---|
| $999,000 | $0 | $3,996 |
| $1,150,000 | $11,500 | $4,600 |
| $1,800,000 | $18,000 | $7,200 |
| $2,400,000 | $24,000 | $9,600 |
That cliff at $1 million is why a $999,000 offer and a $1,000,000 offer can differ by $10,000 in the buyer’s cash needed at closing. Where those dollars sit among the other costs is laid out in What Closing Costs Actually Look Like on Long Island, and the seller-side view is in The Real Cost of Selling a Home on Long Island.
The Rollout That Ended Up in Court
Writing a tax into law turned out to be easier than collecting it. About 17,000 notices went out in July telling owners they might owe the surcharge and would need to claim an exemption. According to reporting by The City Reporter, republished by Planetizen, the Department of Finance later determined that nearly 6,000 of them, or 35 percent, went to homes that were primary residences and not subject to the tax.
Homeowners sued, and on September 29 Justice Wayne Ozzi sided with them on the process. In his written decision, quoted by ABC7, he found that “Homeowners are being substantially harmed and penalized needlessly.” The ruling did not decide whether the tax itself is lawful. The lawsuit did not challenge that, and ABC7 noted the judge ruled only that the implementation was flawed.
Both sides responded within hours. Attorney Randy Mastro, who represented the homeowners, said the city should “do it over and do it right,” issuing notices only to those it has determined owe the tax. A mayoral spokesperson, quoted by Fortune, said the decision “is wrong, and we will invoke a stay of the injunction.” Fortune reported that the city had expected the surcharge to raise at least $500 million a year.
By October 6, the date of the exemption deadline, The Real Deal’s headline reported that the city had pushed the deadline back another week. The outlet’s article could not be opened for this post, so the new date is not stated here. As of October 9, the appeal’s outcome had not been confirmed in any source reviewed. Anyone with a city property should check the Department of Finance directly.
A second challenge is separate from the first. The Ross and Wynn lawsuit against the state argues the tax is unconstitutional, a question the September 29 ruling left untouched.
Questions That Keep Coming Up
Did the mansion tax threshold change in 2026?
Not according to the sources reviewed. The Tax Department’s page still lists 1 percent for residences at $1 million or more, and a September review of the final budget described the tax as unchanged from 2019. Bills that would move the threshold are covered in the earlier guide linked above.
Does the pied-à-terre surcharge apply on Long Island?
It applies to New York City homes that are not a primary residence. Reports on the thresholds describe them as over $5 million for one- to three-family houses and $1 million or more for co-ops, per Fortune and CNN. Rates were not stated in those articles and are left out here.
Who pays the mansion tax, buyer or seller?
The buyer, with the seller liable only if the buyer does not pay or is exempt. The seller pays the base transfer tax.
Could the rules change again?
They can. A brokerage review published in September expects the debate over the mansion tax to return in a future budget, but that is a forecast from one outlet, not a plan on the legislative calendar.
This is for informational purposes only — consult a licensed attorney or financial advisor for your specific situation.
Real estate markets change. For current listings and market data, contact Maison Pawli at maisonpawli.com/about/.
Sources
- New York State Department of Taxation and Finance, Real property transfer tax
- New York State Senate, Senate advances 2026 one-house budget resolution (March 10, 2026)
- Governor’s office, rush transcript of the pied-à-terre tax announcement (April 15, 2026)
- The Real Deal, Hochul announces $268B budget with pied-à-terre tax (May 7, 2026)
- Realty Collective, The NYC Mansion Tax in 2026, Revisited (September 13, 2026)
- CPA Practice Advisor, Mamdani sparks backlash with social media post (July 27, 2026)
- ABC7 New York, judge rules on the pied-à-terre tax rollout (September 29, 2026)
- Fortune, judge orders city to cancel pied-à-terre tax notices (September 29, 2026)
- KVIA / CNN, judge orders city to scrap rollout (September 29, 2026)
- Planetizen / The City Reporter, nearly 6,000 warnings went to homes that did not qualify (October 3, 2026)
- The Real Deal, Mamdani pushes pied-à-terre exemption deadline another week (October 6, 2026); headline only, article not opened
