The Week In Review: June 9, 2026

A Tale Of Two Cities

The pied-à-terre tax

The New York City pied-à-terre tax is now law.

It imposes an annual surcharge on luxury residences that are not an owner’s primary home. Condos, co-ops, and townhomes used as second homes are now subject to an additional annual tax beginning with properties assessed at $1 million and climbing from there.

I’ve been thinking about New York a lot lately because an unusually large percentage of our business this year has involved New York buyers. Roughly 25%. Parents purchasing Washington pied-à-terres to visit children and grandchildren. Others are relocating permanently. Purchase prices have ranged from $2.5 million to nearly $6 million.

The rationale behind the pied-à-terre tax is a familiar one: these owners can afford it.

I’ve always thought the distinction between what someone can pay and what they should pay is a tricky one. Pied-à-terre owners place relatively little demand on a city. They don’t use schools. They make light use of municipal services. Yet they spend freely on restaurants, retail, cultural institutions, home improvement projects, and local employment.

In other words, they’re mostly frosting.

The new tax is not insignificant. Annual surcharges can reach 6.5%. One New York buyer I worked with this year would have faced an additional annual tax bill approaching $225,000 had their Washington purchase been located in Manhattan.

Ouch.

What has struck me is how attractive Washington looks through New York eyes.

That’s not just New Yorkers, but international buyers looking for a foothold in the northeast corridor. Washington offers political and economic stability, excellent universities, and global connectivity, but with a tax and ownership environment that is generally more welcoming to wealth creation and preservation.

A buyer accustomed to Manhattan pricing can acquire a substantial Georgetown townhouse, a Kalorama residence, or a luxury condominium with meaningful outdoor space for a fraction of what comparable real estate would command in New York.

And the differences don’t stop there. Washington’s property taxes are lower. Sales taxes are lower. There is no equivalent pied-à-terre surcharge. For affluent households, the savings can be substantial.

For decades, Washingtonians have looked north with a touch of envy - the energy, the culture, the restaurants, the prestige...

While New York will always hold a unique place in the American imagination, I’m increasingly seeing buyers embrace Washington in a way they haven’t before. Washington offers extraordinary architecture, world-class cultural institutions, vibrant neighborhoods, remarkable green space, and access to some of the nation’s most influential communities - all at a cost that feels surprisingly reasonable.

For many buyers, it is becoming the ultimate luxury value play.