The Pied-à-Terre Tax, Defined

Every term in New York's pied-à-terre tax, defined in one self-contained paragraph each — precise enough to quote, short enough to remember. Definitions reflect the statute (Tax Law Article 30-C), DOF's final rules adopted July 14, 2026, and DOF's published roll and deadlines, as of the date above.

Pied-à-terre tax

The common name for New York City's non-primary residence surcharge (Tax Law Article 30-C, §1353), signed May 28, 2026 and effective July 1, 2026. It is an annual surcharge on homes that are not anyone's primary residence: condos and co-ops pay a flat 4%–6.5% of DOF market value over a $1,000,000 threshold; 1–3-family houses pay 0.8%–1.3% over $5,000,000. It sunsets June 30, 2031 unless extended.

DOF market value

The Department of Finance's own valuation of a property — the "Market Value" line on the annual Notice of Property Value. For condos and co-ops it is an income-approach figure required by law (RPTL §581), typically higher than the assessed value (which is 45% of it) but below what the unit would sell for. The pied-à-terre surcharge's threshold test and rate both apply to this number — not to the sale price.

Assessed value

45% of the DOF market value for class 2 properties — the base for the regular property-tax bill. The pied-à-terre surcharge does NOT use assessed value; owners who test their eligibility against the assessed value understate their exposure by more than half.

Notice of Property Value (NOPV)

The statement DOF mails each owner every January showing the property's market value and assessed value for the coming tax year. The "Market Value" line on the NOPV is the pied-à-terre surcharge base.

Non-primary residence

A dwelling that is not the primary residence of the owner, the owner's immediate family member, or a tenant under a qualifying 12-month lease. Non-primary status — not luxury, not foreign ownership — is what triggers the surcharge.

Primary residence

The home a person occupies more than half the year as their true, fixed residence. Under DOF's final rules, primary residence is documented with the owner's most recent state or federal tax return showing the address, or a combination of two documents such as a New York State driver's license or ID and a voter identification card.

Immediate family member

Under the statute: a spouse, child, sibling, parent, grandparent or grandchild. Occupancy by an immediate family member as their primary residence for more than half the year exempts the unit.

Arm's-length lease

A bona fide lease of at least 12 months, at market terms, to an unrelated natural person who uses the unit as their primary residence. It is the third exemption to the surcharge. A below-market lease to a friend, a corporate tenancy, or a unit merely listed for rent does not qualify.

Phase 1

July 1, 2026 through June 30, 2028. Condos and co-ops are tested on DOF market value with a $1M threshold and flat rates of 4% ($1M–$3M), 5.25% ($3M–$5M) and 6.5% (over $5M).

Phase 2

From July 1, 2028. Condos and co-ops are re-valued on comparable sales — closer to true market prices — and shift to the house schedule: a $5,000,000 threshold with rates of 0.8%–1.3%. Many units that owe in Phase 1 fall out of the tax in Phase 2. DOF has deferred the Phase 2 valuation methodology to future rulemaking.

Supplemental Market Value Roll

The DOF file, first published July 2026, listing the market values used to administer the surcharge — 959,710 records citywide, of which 24,173 properties test over their thresholds. The roll remains open to correction through December 2026. It is the dataset behind piedaterretax.nyc/database.

Fractional-share method

DOF's final-rule methodology for valuing co-op units: the unit's value equals its shares' fraction of the building's total market value. Because the share ledger — not the specific apartment — drives the number, shareholders in high-value buildings are often surprised on the high side.

Rebuttal window

The 30 days after a DOF non-primary residence notice in which the owner may document that the home is a primary residence. Missing the window means the surcharge is billed as assessed.

Surcharge exemption application

The filing that claims an exemption (primary residence, family occupancy, or qualifying lease). DOF's published deadlines are August 21, 2026 for residential homes and condos and August 24, 2026 for co-op units — the date printed on the owner's own DOF letter governs.

Flat vs. marginal rates

Two readings of the statute's rate table. Flat: the band's rate applies to the entire market value once over the threshold — a $3.1M condo owes $162,750 (5.25% of the full value). Marginal: each slice is taxed at its own band's rate — the same condo would owe $85,250. The statute is ambiguous; the conservative flat reading (used by piedaterretax.nyc, confirmed by counsel) is the higher figure, so a marginal administration could only lower bills.

Look-through (entity ownership)

The statute's attribution rule: ownership through LLCs, partnerships, corporations and trusts is traced to the natural persons behind them, tiered structures are disregarded, and the analysis runs on the entire interest the entity holds. Entity ownership is not an exemption strategy.

Sunset provision

The statute expires June 30, 2031 unless the Legislature extends it. The five-year horizon is a real input to the keep-rent-sell decision on marginal units.

Mansion tax (contrast)

A one-time 1%–3.9% transfer tax paid at purchase on NYC homes of $1M or more — unrelated to the pied-à-terre tax, which is an annual surcharge on non-primary use. A $3M pied-à-terre purchase pays both: the mansion tax once at closing, and the surcharge every year it remains a non-primary residence.

Disclaimer. This page is educational information from Conquest, a licensed New York real estate brokerage. It is not legal, tax, or accounting advice, and no advisory relationship is created by reading it. Deadlines and figures reflect DOF's published rules and roll as of the "last updated" date above; the date printed on your own DOF letter always governs.