Is New York's Pied-à-Terre Tax Driving the Top of Our Market?

The New York Post reported a record $12 million sale for a new condo in Greenwich earlier this month, roughly 50% higher than any condo in Greenwich had previously traded for. The developer credited New York City's new Pied-à-Terre tax on second homes for the record demand. That raises a reasonable question for anyone who owns, or is looking to own property in Fairfield County: can a tax passed in Manhattan move prices in Connecticut? Our data indicates the answer is probably yes, that it can help accelerate an already rising trend at the top of the market, but probably not by as much as that one record might indicate.

What New York City's New Tax Actually Does

The surcharge took effect on July 1 of this year and is scheduled to run through the middle of 2031. It applies to a New York City property when the owner's primary residence is outside New York City and the unit is not being rented out, and it is charged annually on top of the existing property tax the owner already pays.

The rate schedules look severe at first glance. Condominiums and cooperatives are charged 4%, rising to 6.5% at the upper end. One to three family houses are charged between 0.8% and 1.3%. The gap between those two tax rates is not what it initially appears, as the two property types are valued by the city using different methodologies.

Every property in New York City carries a value on the Department of Finance's books, and for apartments that number has little to do with its current market value. State law requires the city to value cooperatives and condominiums as though the building were a rental, using income from comparable rental buildings rather than what the units themselves actually trade for. New York City's own Comptroller found that the resulting figures capture roughly one fifth of real market value, and closer to one seventh at the top of the market.

So the $1 million threshold in the condominium schedule is not a $1 million apartment. Worked backward at the ratios the Comptroller measured, it describes something closer to a $6 or $7 million one. Both schedules are aimed at broadly the same tier. For an owner who is captured, 4% of a million dollars on the city's books is $40,000 a year, charged every year, on a property they may have held for decades.

The Deal That Started the Conversation

The residences in question are at Chilston Court, a 78-unit development from Caspi Development in downtown Greenwich, designed by Robert A.M. Stern Architects and not expected to be completed until 2028. Founder Josh Caspi told the Post that units between $9 million and $10 million sold first, that he raised prices repeatedly as demand held, and that he eventually withheld the remaining top-tier units rather than let buyers keep bidding against one another. He also said that roughly a quarter of his buyers have places in New York City, and credited the new tax with moving several of them north permanently.

What Our Own Sales Data Shows

Condominiums and cooperatives

Across the nine towns I follow most closely, condo and co-op sales have grown modestly. The trailing 12 months brought 1,243 sales at a median of $495,000, against 1,221 sales at $475,222 the year before and 1,175 at $442,500 the year before that. That is a market moving at a steady walk.

Meanwhile, the top of the market is doing something different. Condo sales at $2 million and above went from 29 two years ago, to 24 last year, to 42 over the trailing 12 months. In Greenwich alone the median condo price reached $1,062,500 across 70 sales, up from $920,000 across 56 sales, a move of about 15.5% on a higher transaction volume.

One caveat on the Greenwich figures specifically. Greenwich runs its own local MLS alongside SmartMLS, and our feed reads only the latter, so everything shown here could understate actual Greenwich activity.

Single-family houses

Total single-family volume across the nine towns has essentially been flat for three years: 2,926 sales two years ago, then 3,027 the following year, against 3,007 over the trailing 12 months. Underneath it, sales at $3 million and above climbed from 252 to 352 to 426. Sales at $5 million and above climbed from 63 to 80 to 118. The share of all single-family sales trading above $5 million rose from 2.2% to 3.9% while the market volume itself stood still.

The very top has moved fastest. Comparing the same January through late August window each year, sales above $10 million went 1, then 5, then 5, and now 9. This year has already produced closings at $15.5M in Westport, $14.6M in Greenwich, $13.0M in Darien and $12.0M in Fairfield.

So Is the Tax Causing This?

Not by itself, and the dates make that clear. The acceleration at the top of the Fairfield County market has been running for two full years, well before Mayor Mamdani took office and the thought of his Pied-à-Terre tax even existed. It was announced this past April, signed in May and took effect in July. Sales that closed here this summer were mostly contracted in late winter and spring, before any of it was law.

What the tax appears to be is an accelerant rather than the origin. The movement of high-earning households from New York City into lower Fairfield County has been underway since 2020, driven by space, schools, the trains and Connecticut's income tax treatment (and a global pandemic). A new tax on a high end NYC apartment might not be in itself a reason for that owner to move, but it could just be the final push they needed to act on a decision that had been brewing for some time.

The Part That Complicates the Story

Rising volume at the top does not mean sellers are naming their price. Over the trailing 12 months, single-family homes selling below $3 million closed at a median of 102.9% of their original asking price. Homes between $3 million and $5 million closed at 100.2%. Homes above $5 million closed at 97.0%.

More is trading at the top, and it is trading through negotiation rather than competition. There are 68 homes currently asking $5 million or more across the nine towns, against 118 that sold in the past year, and a good share of that standing inventory has been listed for months. Demand at the top is real and it is growing, but it is selective about what it will pay for.

What I Am Watching

Two dates. The new Pied-à-Terre tax is being litigated, and a hearing is scheduled for August 31 on whether the city can keep collecting while the underlying case proceeds. A Staten Island judge briefly halted the rollout in early August before an appellate court allowed it to continue, so the policy is shaping eight-figure decisions while its own legal footing is unsettled.

The second date is July 1, 2028, when New York is scheduled to begin valuing condos and co-ops off comparable sales rather than comparable rentals. If that happens as written, the city's book value for those apartments moves toward what they are actually worth, and the number of owners pulled into the tax could grow considerably. That is the change that could provide a material impact to our Fairfield County market.

If You Own at This Level

A record sale at a new building tells you what one buyer will pay for one product. It does not reset the value of a house or an apartment down the road, and reading it that way is how sellers end up sitting through a season. What matters to your number is what your own property type and price band have actually done over the last year, which in several parts of this market is a genuinely good story that never made a headline. If you would like to see those figures for your specific property, I am glad to walk through them with you.

Figures reflect SmartMLS sale listings across Greenwich, Stamford, Darien, New Canaan, Westport, Fairfield, Norwalk, Wilton and Ridgefield, pulled August 25, 2026. Rentals excluded. Greenwich figures understate town activity for the reason noted above.