The $120,000 Question
A Manhattan condo owner with a Department of Finance market value of $3 million faces an annual pied-à-terre surcharge of $120,000 if the unit is not their primary residence.
The calculation is straightforward but unforgiving. New York's pied-à-terre tax applies a flat 4% rate to the full DOF market value for condos and co-ops valued between $1 million and $3 million. Once market value clears the threshold, the bracket rate applies to the full market value, not just the excess above $1 million.
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows 722 condo and co-op units citywide fall in the $3 million to $5 million range, where the surcharge jumps to 5.25%. These owners face the steepest percentage increase in the rate schedule.
Market Value, Not Assessed Value
The surcharge calculation starts with DOF market value, the figure that appears on the 'Market Value' line of your Notice of Property Value. This is not the assessed value used for regular property taxes.
For Class-2 condos and co-ops, assessed value typically runs about 45% of market value. A $3 million market value condo carries an assessed value near $1.35 million for regular tax purposes. The pied-à-terre surcharge ignores that discount entirely.
DOF's adopted rules state the surcharge is 'calculated as the product of a surcharge rate established by statute and the market value of the applicable property.' The distinction matters: using assessed value would cut the annual bill from $120,000 to $54,000.
The Rate Schedule Through 2028
Phase 1 rates run from July 1, 2026 through June 30, 2028. For condos and co-ops, the schedule is 4% on market values from $1 million to $3 million, 5.25% from $3 million to $5 million, and 6.5% above $5 million.
A unit valued at exactly $3 million pays $120,000 annually. A unit valued at $3.1 million jumps to the 5.25% bracket and pays $162,750 on the full value.
The average surcharge for units in the $3 million to $5 million band is $192,575, according to Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll. The median is lower because most units cluster near the $3 million floor.
Two-Year Exposure
Phase 1 covers fiscal years 2026-27 and 2027-28. An owner of a $3 million non-primary residence faces $240,000 in total surcharges across both years, assuming market value holds steady.
DOF determines non-primary status as of the January 5 taxable status date preceding each fiscal year. An owner who establishes primary residence by January 5, 2027 avoids the second-year charge but still owes the first year based on January 5, 2026 status.
The law provides exemptions for units that serve as the primary residence of the owner or immediate family members, or units with a 12-month arm's-length natural-person tenant. Owners who received DOF notices had until October 6, 2026 to apply for exemptions, extended twice from the original August deadlines.
The 2028 Reset Question
Phase 2 begins July 1, 2028 with a different rate structure. Condos and co-ops move to the same schedule as houses: 0.8% on values from $5 million to $15 million, 1.05% from $15 million to $25 million, and 1.3% above $25 million.
The threshold jumps from $1 million to $5 million. A $3 million condo that paid $120,000 annually in Phase 1 would owe nothing in Phase 2 under current law.
The catch is revaluation. DOF will reassess condo and co-op market values based on comparable sales for Phase 2. A unit valued at $3 million in 2026 could easily clear $5 million by 2028 in Manhattan's market.
Geographic Concentration
Manhattan dominates the exposure map. The borough accounts for 16,709 of the 17,358 condo and co-op units above the $1 million threshold citywide, according to Conquest's analysis.
ZIP code 10013 in Tribeca leads with 1,751 exposed units, followed by 10019 in Midtown West with 975 units. The average surcharge in 10019 runs $86,862, reflecting higher market values that push more units into the 5.25% and 6.5% brackets.
Brooklyn adds 649 exposed condo and co-op units with an average surcharge of $57,678. The outer boroughs contribute fewer than 50 units combined.
Payment Timeline and Appeals
DOF mailed 'You may be subject to...' notices to potentially affected owners no later than August 30, 2026. Owners who believe their unit qualifies for an exemption had 30 days from the notice transmission date to appeal the determination.
The surcharge operates separately from regular property tax abatements and exemptions. STAR, co-op/condo abatements, and other programs do not reduce the pied-à-terre bill.
The law sunsets June 30, 2031 unless extended. For now, owners face five years of exposure across two different rate structures.
What to Watch Next
Market value movements between now and July 2028 will determine Phase 2 exposure. Units currently below the $5 million Phase 2 threshold could cross it through appreciation or DOF revaluation methodology changes.
Legislative action remains possible. The Comptroller projected roughly $500 million in annual revenue, but actual collections depend on how many units qualify for exemptions and how owners respond to the new costs.
Check your current DOF market value and potential surcharge with our free calculator below. The tool uses the same July 2026 Supplemental Market Value Roll data that determines actual liability.
Frequently asked questions
Is my $3 million condo subject to the pied-à-terre tax?
Yes, if your $3 million condo is not your primary residence, you face an annual pied-à-terre surcharge of $120,000. The tax applies a flat 4% rate to the full DOF market value for condos and co-ops valued between $1 million and $3 million that are not primary residences.
How much is the pied-à-terre tax on a $3.1 million apartment?
A unit valued at $3.1 million pays $162,750 annually because it jumps to the 5.25% bracket and the rate applies to the full market value. Once market value clears the $3 million threshold, the higher 5.25% rate applies to the entire value, not just the excess above $3 million.
Does the pied-à-terre tax change after 2028?
Yes, Phase 2 begins July 1, 2028 with a different rate structure where the threshold jumps from $1 million to $5 million. A $3 million condo that paid $120,000 annually in Phase 1 would owe nothing in Phase 2 under current law, but DOF will reassess market values and a unit could easily clear $5 million by 2028.