The Declaration Burden: Every Owner Files, Not Just Those Who Pay
Canada's vacancy taxes reveal the hidden compliance cost that NYC second-home owners may face: annual declarations for every owner, not just payment by those who owe tax.
In Vancouver and Toronto, all residential owners must file a yearly occupancy declaration by a fixed deadline, and missing it automatically treats the home as vacant and triggers a substantial tax at rates up to 3% of assessed value. For NYC's new pied-à-terre surcharge, the most realistic preview is that owners of covered second homes should expect a similar annual 'prove your primary residence' process to claim exemption.
The federal Underused Housing Tax, though repealed for 2025 forward, operated the same way through 2024. Affected owners had to file an annual return for each residential property, even if exempt from paying the tax in that year.
Federal Canada's Underused Housing Tax: Repealed But Still Enforceable
Canada's federal Underused Housing Tax was a 1% annual tax on the value of vacant or underused residential property owned by non-resident and certain domestic corporations, effective January 1, 2022.
Bill C-15 received royal assent on March 26, 2026 and repealed the tax for 2025 and later calendar years. The repeal is not retroactive—returns and tax for 2022, 2023, and 2024 remain fully enforceable, with CRA able to assess unfiled returns and apply the 1% tax and penalties.
The tax rate was 1% of the property's 'taxable value,' typically the greater of assessed value for property-tax purposes and most recent arm's-length sale price, unless the owner elected to use fair market value via prescribed procedures.
Vancouver's Empty Homes Tax: 3% Rate, Universal Filing
Vancouver operates the clearest model of a municipal vacancy tax that forces every owner to prove occupancy annually.
Properties deemed or declared empty in the 2025 reference year owe a tax equal to 3% of the property's 2025 assessed taxable value. The rate has climbed from 1% in 2017-2019 to 1.25% in 2020, reaching the current 3% level in 2021.
All residential property owners in Vancouver must complete an Empty Homes Tax declaration annually by early February for the preceding reference year. Failing to file triggers a bylaw fine and causes the property to be automatically classified as empty, regardless of actual occupancy.
Principal Residence Standards: One Address, Functional Test
Vancouver defines principal residence as the place where a person usually lives and conducts daily affairs, including receiving mail, paying bills, and using the address for tax, health insurance, driver's license, vehicle registration, and utility billing.
An owner can have only one principal residence for Empty Homes Tax purposes. If a residential property is the owner's principal residence, it is exempt from the tax regardless of how much time the owner actually occupies the property—there is no minimum occupancy period as long as it is genuinely the principal residence.
Properties are also exempt if they serve as the principal residence of a family member or friend for at least six months of the reference year, or if rented for residential purposes for at least six months in periods of 30 consecutive days.
NYC's Pied-à-Terre Surcharge: Current Structure and Exemption Process
NYC's pied-à-terre tax, signed May 28, 2026 and effective July 1, 2026, is an annual surcharge on non-primary NYC residences that sunsets June 30, 2031.
The surcharge applies flat rates to the full DOF market value once properties clear the threshold: 4% for condos and co-ops valued $1 million to $3 million, 5.25% for $3 million to $5 million, and 6.5% for $5 million and above.
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows roughly 24,000 units citywide would owe the surcharge if they are non-primary residences, with Manhattan condos and co-ops representing about 16,700 of those units.
Exemptions cover primary residences of the owner or immediate family, or units with a 12-month arm's-length natural-person tenant. The exemption application deadline was extended to September 18, 2026 for all owners who received DOF's 'You may be subject to...' notice.
The Annual Compliance Reality: Lessons from Federal UHT
Under the federal Underused Housing Tax, affected owners had to file an annual return for each property on December 31 of the year, even when qualifying for exemptions.
Owners who qualified for exemptions—such as qualifying vacation property, renovation, disaster, or seasonal inaccessibility—still had to file by the April 30 deadline to claim the exemption and avoid penalties.
The statutory deadline to file the UHT return and pay any tax was April 30 of the following calendar year, with significant penalties for returns filed even one day late. Professional alerts emphasized that this filing obligation applied whether or not the unit was truly vacant.
What NYC Owners Should Expect: Annual Proof Requirements
Canada's model suggests NYC owners should prepare for annual documentation requirements to maintain primary residence exemptions, not just a one-time application.
Non-primary status under NYC's surcharge is determined as of the January 5 taxable status date preceding the fiscal year, not by how much of the year the owner spent in the unit. Owners get 30 days from a notice's transmission date to appeal.
DOF mails non-primary notices by August 30, with first payments due January 1, 2027. The Canadian experience indicates that missing annual compliance deadlines can trigger automatic classification as a taxable second home, regardless of actual use patterns.
Market Value Exposure Across NYC
Manhattan leads exposure with roughly 17,000 condos and co-ops above the $1 million threshold, averaging $68,600 in potential surcharge liability. Manhattan houses add another 3,400 units above the $5 million threshold for single-family properties.
Brooklyn shows 3,300 houses and 650 condos and co-ops that would face the surcharge if classified as non-primary residences. The outer boroughs have smaller exposure, with 77 houses in the Bronx and 35 in Queens clearing their respective thresholds.
ZIP codes 10019 and 10012 show the highest condo and co-op exposure, with 975 and 932 units respectively above the $1 million threshold. These areas average surcharge liability around $86,000 annually.
Conquest's free DOF market value and surcharge calculator helps owners determine their exact exposure under the current rates and thresholds.
Frequently asked questions
Is my NYC apartment subject to annual filing requirements for the pied-à-terre tax?
Canada's vacancy tax models suggest NYC owners should prepare for annual documentation requirements to maintain primary residence exemptions, not just a one-time application. The Canadian experience indicates that missing annual compliance deadlines can trigger automatic classification as a taxable second home, regardless of actual use patterns.
How much is the pied-à-terre tax on my NYC condo or co-op?
The surcharge applies flat rates to the full DOF market value: 4% for condos and co-ops valued $1 million to $3 million, 5.25% for $3 million to $5 million, and 6.5% for $5 million and above. Manhattan condos and co-ops average $68,600 in potential surcharge liability.
Does the ruling change when I need to prove my apartment is my primary residence?
Non-primary status under NYC's surcharge is determined as of the January 5 taxable status date preceding the fiscal year, not by how much of the year the owner spent in the unit. DOF mails non-primary notices by August 30, with first payments due January 1, 2027.