One of the unintended consequences—or benefits, depending on who you ask—of the pied-à-terre tax is it’s acting like an unofficial state auditor.
The tax is meant to target secondary homes: If you claim your New York City residence is second to one you own out of state, you may owe the pied-à-terre tax, depending on the home’s value. Now, if you happen to live at that secondary residence to reap the joys of what comes with living in the Big Apple, but you file your income tax at a residence out of state, or register your car out of state to save on taxes and insurance, you’re committing tax fraud.
