As of July 1, 2026, New York City's pied-à-terre tax is in effect across the five boroughs. Although the tax was halted on August 10, it was reinstated on August 13. Enacted under New York Tax Law §§ 1350–1356, the tax applies to certain high-value residential properties that are not used as a primary residence. Properties owned through trusts and other entities may also be subject to the tax, making this an important moment to review both your ownership structure and your estate plan. The Department of Finance has already begun notifying affected owners. Following criticism from elected officials and tax attorneys that the initial notification list caused widespread confusion among residents who clearly did not belong on it, the exemption application was extended to September 18, 2026. A property is generally exempt if it serves as the primary residence of the owner, an immediate family member, or a tenant under a lease of at least one year. An owner may claim only one primary residence for purposes of the tax. The tax structure rolls out in two phases under the guidelines of Rules of the City of New York (RCNY) Title 19, Chapter 62. In phase 1, running from July 1, 2026 through June 30, 2028, the city uses its existing property tax assessment rules, which significantly understate the true market value of condos and co-ops. To make up for these artificially low property values, Phase 1 sets a lower starting entry point of $1 million in assessed value for condos and co-ops, though a $1 million official tax value often represents a real-world market price in excess of $4 million, and applies a higher tax rate of between 4% and 6.5%. Single-family homes in Phase 1 use their standard market value with a $5 million entry threshold and lower rates between 0.8% and 1.3%. In phase 2, running from July 1, 2028 through June 30, 2031, the city replaces this dual setup with a new system that calculates actual real-world market values for condos and co-ops using comparable property sales. Once this new valuation system is in place, all housing types will fall under the same standard: a $5 million market value entry point and matching tax rates ranging from 0.8% to 1.3%. As a result, any secondary residence with an actual market value below $5 million will be completely exempt from the surcharge starting in July 2028. For properties held in trust, the law presents further challenges. According to the administrative rules in 19 RCNY § 62-06, a trust-owned residence will remain subject to the tax unless the trust has a single qualifying beneficiary or family member of a beneficiary who occupies the property as a primary residence. Because many estate plans involve multiple current or remainder beneficiaries, the structure of ownership alone may determine whether the tax applies. Discretionary trusts and multi-generational trusts with contingent beneficiaries are especially vulnerable and may trigger the tax automatically under the baseline standards of Tax Law § 1351(m). The law…