Hold or sell? Add the bridge to your basis.

Get my exact DOF value & bridge — free →

A worked example

An owner bought a Manhattan condo for $2,600,000. Its DOF market value on the FY2026–27 roll is $2,000,000 and it would sell today for about $3,400,000. It is not their primary residence.

Hold through Phase 1 (pay the bridge)	Amount
Annual Phase-1 surcharge (4% × $2,000,000 DOF value)	$80,000
Two-year bridge (2027 + 2028 bills)	$160,000
Effective basis (paid $2,600,000 + bridge)	$2,760,000
Still in the money after the bridge ($3,400,000 − $2,760,000)	$640,000
Phase 2 (July 2028): value under $5M → drops out, owes $0 from then on	—
Sell now instead	Amount
Sale price	$3,400,000
− Brokerage commission (6%)	− $204,000
− NYC transfer tax (RPTT 1.425%)	− $48,450
− NYS transfer tax (0.65% at $3M+)	− $22,100
− Attorney & closing (est.)	− $5,000
= Net sale proceeds (selling costs $279,550, 8.2%)	$3,120,450
− What they paid	− $2,600,000
= Net gain if they sell now	$520,450
Hold vs. sell: holding keeps them ahead by	$119,550

Paying the full $160,000 bridge still leaves this owner $640,000 ahead of what they paid, and they keep an apartment that stops owing the surcharge at Phase 2. Selling now nets $520,450 after $279,550 in commission, transfer taxes and closing costs — $119,550 less than holding, before counting any appreciation over the next two years. A 12-month arm's-length lease during Phase 1 would erase the bridge entirely. Load this example into the calculator →

Why the bridge exists

The surcharge runs in two phases. Phase 1 (July 1, 2026 – June 30, 2028) taxes any non-primary condo or co-op whose DOF market value tops $1,000,000 — a flat 4% up to $3M, 5.25% to $5M, 6.5% above. Phase 2, from July 1, 2028, throws that out and re-bases condos and co-ops on comparable sales with a much higher $5,000,000 threshold. The practical effect: a unit that owes tens of thousands a year today, but is genuinely worth under about $5M, very likely drops out of the tax entirely in 2028 and owes $0 from then on.

So for a large band of owners the tax isn't a permanent carrying cost — it's a two-year toll. This calculator sizes that toll and stacks it against the two things that actually matter: how far you're in the money on the apartment, and what it would cost to sell instead.

How the math works

• The bridge = two annual Phase-1 surcharges (the 2027 and 2028 bills) — after that, Phase 2 relief kicks in for units under the threshold. A 12-month arm's-length lease can zero even those two years; this tool shows the full-freight case.
• Add it to your basis. Treat the bridge as part of what the apartment costs you to hold: effective basis = what you paid + the bridge. If today's value still clears that, you're in the money even after the tax — and then you own a unit that's tax-free from 2028.
• Compare to selling. Selling now runs roughly 7–8% of the price in brokerage and closing costs — and for a foreign seller, up to 15% FIRPTA withholding on top — before you count the appreciation you give up. On most units in the bridge zone, that dwarfs a two-year toll.

The honest caveat

Phase 2's relief rides on DOF's comparable-sales methodology, which the city has not yet published. A unit worth comfortably under $5M is a confident exit; one in roughly the $4.5M–$5.5M band is a coin-flip until the rules are written. And a unit that will still be valued at $5M+ in Phase 2 doesn't get bridge relief at all — it stays taxed in both phases, so the "hold and wait it out" logic doesn't apply. This tool flags which of those three you're in.

Questions owners ask

What does it cost to sell a NYC condo now instead of paying the bridge?

Roughly 8% of the price: a 6% brokerage commission, the NYC Real Property Transfer Tax of 1.425% on residential sales over $500,000, the NYS transfer tax of 0.4% (0.65% on NYC residential sales of $3,000,000 or more) and about $5,000 in attorney and closing costs. On a $3,400,000 sale that is $279,550, leaving $3,120,450 in net proceeds; an owner who paid $2,600,000 nets a $520,450 gain, versus $640,000 still in the money if they hold and pay a $160,000 two-year bridge on a $2,000,000 DOF value. Foreign sellers may also face 15% FIRPTA withholding.

What is the pied-à-terre tax 'bridge'?

Phase 1 of the surcharge (July 1, 2026 – June 30, 2028) taxes non-primary condos and co-ops above a $1M DOF market value. Phase 2, from July 1, 2028, re-bases them on comparable sales with a $5M threshold — so a unit worth under about $5M very likely drops out and owes $0. The 'bridge' is the roughly two years of Phase-1 surcharge an owner pays to get from today to that Phase-2 relief while keeping the apartment.

How do I decide whether to hold through the bridge or sell?

Add the two-year bridge cost to what you paid for the unit — that is your effective basis for holding. If today's market value still exceeds that number, you are 'in the money' even after paying the bridge, and holding is usually worth it because Phase 2 then makes the unit tax-free. Compare that bridge (often $100k–$200k on a $2–3M condo) against the cost of selling now — roughly 7–8% of the price in brokerage and closing costs, plus up to 15% FIRPTA withholding for foreign sellers, plus the loss of future appreciation. Selling is typically the far larger number.

Which units actually drop out of the tax at Phase 2?

Condos and co-ops whose Phase-2 comparable-sales value comes in under the $5M threshold. DOF has not yet published the exact Phase-2 valuation methodology, so a unit worth well under $5M is a confident exit, and one in roughly the $4.5M–$5.5M band is a coin-flip. Houses are unaffected: a 1–3 family under $5M owes nothing in either phase, and one over $5M stays taxed in both.

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. Estimates use DOF's published Phase-1 rates and the statutory $5M Phase-2 threshold; Phase-2 valuation rules are not yet final.