The $192,000 Problem
A Manhattan owner who combined two Upper East Side co-op units in 2019 received DOF's non-primary residence notice in July showing a $4.8 million market value—triggering the 5.25% surcharge rate on the full amount.
The owner's building records show the merger as complete, but DOF's July 2026 Supplemental Market Value Roll still carries both original units with separate valuations of $2.4 million each. Under the pied-à-terre tax's flat-rate structure, that difference determines whether the annual bill lands at $96,000 (4% on each unit) or $252,000 (5.25% on the combined value).
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows roughly 17,000 Manhattan condos and co-ops would owe the surcharge if they are non-primary residences. The 722 units valued between $3 million and $5 million face an average surcharge of $192,575—nearly triple the $58,048 average for units in the $1 million to $3 million bracket.
Where DOF Records Diverge
The surcharge applies to DOF's market value, not the assessed value used for regular property taxes. For cooperative units, DOF allocates the building's total market value using each unit's statutory share ratio.
Combined apartments create valuation gaps when building records show a merger but DOF's roll maintains the original unit structure. A $4.8 million combination carried as two $2.4 million units stays in the 4% bracket. The same space valued as one unit jumps to 5.25%.
Professional tax alerts indicate DOF adopted final rules on July 14, 2026, but the sources do not establish how DOF handles valuation discrepancies for merged units. The practical issue is whether DOF's records reflect the combination consistently across all taxable apartments.
Checking Your Building's Roll
Owners can verify their unit's DOF market value through the city's property tax records. The surcharge uses the 'Market Value' line from the Notice of Property Value, not the lower assessed value.
For co-ops, check whether DOF shows your shares allocated to one unit or split across the original apartments. Buildings with recent combinations should compare their internal unit roster against DOF's current roll entries.
The exemption application deadline was extended to September 18, 2026. The original deadlines were August 21, 2026 for 1-3 family homes and condo units and August 24, 2026 for co-op units; both are superseded.
What Happens Next
DOF mails non-primary residence determinations by August 30, 2026, with the first surcharge payment due January 1, 2027. Owners have 30 days from a notice's transmission date to challenge the determination.
Starting July 1, 2028, the tax structure shifts toward comparable-sales valuations and lower rates for high-value properties. Combined apartments valued inconsistently now may face different exposures under the phase-two methodology.
Use our free DOF market value checker to verify how your combined apartment appears on the city's current roll and calculate your potential surcharge exposure.
Frequently asked questions
Is my combined apartment subject to the higher pied-à-terre tax rate?
If DOF values your combined apartment as one unit worth over $3 million, you face the 5.25% surcharge rate, but if DOF still carries it as separate units each under $3 million, you pay 4% on each unit. The difference can be substantial—a $4.8 million combination pays either $96,000 (as two $2.4 million units) or $252,000 (as one combined unit).
How much is the pied-à-terre tax on apartments valued between $3-5 million?
Units valued between $3 million and $5 million face an average surcharge of $192,575 if they are non-primary residences. This is nearly triple the $58,048 average for units in the $1 million to $3 million bracket.
Does the pied-à-terre tax use assessed value or market value?
The surcharge applies to DOF's market value, not the assessed value used for regular property taxes. You can find this on the 'Market Value' line from the Notice of Property Value, and for co-ops, DOF allocates the building's total market value using each unit's statutory share ratio.
Sources
- Mayor Mamdani Notifies Property Owners of New Pied-à-Terre Tax
- NYC Finalizes Pied-à-Terre Tax Rules – Property Owners Should ...
- New York Enacts New Pied-à-Terre Tax on Certain High-Value New ...
- New York State Enacts Pied-à-Terre Tax on Expensive Non-Primary ...
- New York City Enacts Annual 'Pied-à-Terre Tax' on Second Homes