The Exposure Universe: 24,000 Units Above Thresholds
Roughly 24,000 New York City residential units carry Department of Finance market values above the pied-à-terre tax thresholds, according to Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll.
These 24,173 units would owe the surcharge if they are non-primary residences. Most are primary residences and owe nothing. The gap between exposure and actual liability explains why the city's revenue projections fall well short of what a full-exposure calculation would suggest.
Manhattan dominates the exposed universe. The borough accounts for roughly 20,000 units above the thresholds — 16,709 condos and co-ops plus 3,356 houses. Brooklyn follows with 3,960 exposed units, while the other boroughs contribute fewer than 150 units combined.
Rate Structure Drives High Per-Unit Costs
The surcharge applies flat rates to full market values once properties clear the thresholds. For condos and co-ops, units valued between $1 million and $3 million face a 4% surcharge on their entire market value.
A $1.5 million condo would owe $60,000 annually if it qualifies as a non-primary residence. The rate jumps to 5.25% for units valued $3 million to $5 million, then 6.5% above $5 million.
Houses face lower rates but higher thresholds. The surcharge starts at $5 million market value with a 0.8% rate, rising to 1.05% for houses valued $15 million to $25 million and 1.3% above $25 million.
Geographic Concentration in High-Value Neighborhoods
Midtown West leads exposure counts among condo and co-op markets. ZIP code 10019 contains 975 units above the $1 million threshold, with an average surcharge of $86,862 per unit.
SoHo follows closely with 932 exposed units in ZIP 10012. The West Village, East Village, and Tribeca round out the top five ZIP codes by unit count.
These neighborhoods reflect the tax's design to target luxury second homes. The median market value in the top exposure ZIP codes ranges from $1.3 million to $1.6 million — well above the $1 million condo threshold but concentrated in the lowest rate band.
The Revenue Reality: Half the Exposure
The Comptroller projected roughly $500 million in annual revenue from the pied-à-terre tax. That figure implies far fewer paying units than the 24,000-unit exposure universe suggests.
Professional estimates place the actual payer count around 11,000 to 13,000 properties citywide. Loeb & Loeb's client alert states the tax is projected to generate approximately $500 million annually from roughly 11,000 properties.
The gap reflects exemptions and primary residence status. Units owned by residents using them as primary homes owe nothing, regardless of value. The same applies to units with qualifying family members or arm's-length tenants occupying them for 12 months.
Primary Residence Exemption Mechanics
Non-primary status is determined as of January 5 preceding each fiscal year — not by how much time owners spend in their units during the year. Owners who received DOF notices had until October 6, 2026, to file exemption applications.
The exemption covers primary residences of owners or immediate family members, including spouses, children, siblings, parents, grandparents, and grandchildren. Properties with 12-month arm's-length natural-person tenants also qualify.
For entity-owned properties, DOF applies majority-interest look-through rules to determine beneficial ownership and exemption eligibility.
Distribution Across Rate Bands
The vast majority of exposed condo and co-op units fall in the lowest rate band. Among the 17,371 exposed units, 16,452 carry market values between $1 million and $3 million, facing the 4% rate.
Only 722 units fall in the middle band ($3 million to $5 million, 5.25% rate). Just 197 units exceed $5 million market value and face the top 6.5% rate.
This distribution suggests most surcharge bills will cluster around $40,000 to $120,000 annually for units that actually owe the tax. The average surcharge for units in the lowest band is $58,048.
Phase Two Changes Coming in 2028
Starting July 1, 2028, the tax structure shifts toward market-rate valuations for all property types. Condos and co-ops will be revalued using comparable sales data without the statutory discounts that currently reduce their DOF market values.
The threshold rises to $5 million for all properties in Phase Two, matching the current house threshold. Rate bands will apply the same 0.8% to 1.3% schedule currently used for houses.
This change could significantly alter both the exposure universe and actual payer counts, depending on how Phase Two market values compare to current DOF assessments.
What Owners Should Monitor
The first surcharge payments come due January 1, 2027, for owners who received non-primary residence notices and did not successfully claim exemptions. DOF mailed these notices by August 30, 2026.
Owners have 30 days from a notice's transmission date to appeal their non-primary designation. The tax sunsets June 30, 2031, unless the Legislature extends it.
Property owners can check their DOF market value and calculate potential surcharge exposure using current assessment data, though primary residence status remains the determining factor for actual liability.
Frequently asked questions
Is my apartment subject to the pied-à-terre tax if it's worth over $1 million?
Your apartment is only subject to the pied-à-terre tax if it's a non-primary residence and valued above the thresholds ($1 million for condos/co-ops, $5 million for houses). Units owned by residents using them as primary homes owe nothing, regardless of value, and the same applies to units with qualifying family members or arm's-length tenants occupying them for 12 months.
How much is the tax on a $1.5 million condo that qualifies as a non-primary residence?
A $1.5 million condo would owe $60,000 annually if it qualifies as a non-primary residence. The surcharge applies a 4% rate to the full market value for condos and co-ops valued between $1 million and $3 million.
Does the ruling change the tax structure in 2028?
Starting July 1, 2028, the tax structure shifts significantly with the threshold rising to $5 million for all properties and rate bands applying the same 0.8% to 1.3% schedule currently used for houses. Condos and co-ops will also be revalued using comparable sales data without the statutory discounts that currently reduce their DOF market values.