Pied‑à‑terre tax adds revenue volatility

A surtax that applies only to properties above a fixed value threshold makes a local property‑tax base binary and therefore more volatile: falling prices or reclassifications can suddenly remove large chunks of taxable value, creating incentives to litigate or game valuations and producing lumpy annual revenue swings. — Policymakers must weigh not just expected revenue but how tax design changes the stability of municipal finance and incentives for housing supply and taxpayer behavior.