The Look-Through Rule Applies to All Entity Ownership
New York City's pied-à-terre tax applies to LLC-owned residential units through a look-through rule that examines the natural person behind the entity. The surcharge, effective July 1, 2026 through June 30, 2031, treats entity-owned properties as non-primary residences unless the beneficial owner can demonstrate qualifying primary residence status elsewhere.
The law uses look-through treatment for LLCs and other entities, according to professional tax alerts reviewing the adopted regulations. This means owning a Manhattan condo through an LLC provides no automatic shield from the annual surcharge if the member uses the unit as a second home.
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows roughly 16,700 Manhattan condos and co-ops would owe the surcharge if they qualify as non-primary residences. The exposure spans all ownership structures.
How DOF Identifies LLC-Owned Units Subject to the Tax
The Department of Finance determines non-primary residence status as of the January 5 taxable status date preceding each fiscal year. For LLC-owned units, DOF applies this test to the beneficial owner behind the entity rather than treating the LLC itself as the occupant.
Units above the statutory thresholds trigger DOF review regardless of ownership structure. For condos and co-ops, the threshold sits at $1 million in DOF market value. Houses face a $5 million threshold.
DOF mailed initial notices to property owners by August 30, 2026, flagging units that may be subject to the surcharge. LLC-owned properties received the same notices as individual owners if their market values exceeded the applicable thresholds.
Market Value Calculation and Rate Structure
The surcharge applies to the full DOF market value once a unit clears the threshold. This is the 'Market Value' line on the Notice of Property Value, not the assessed value used for regular property taxes.
For condos and co-ops valued between $1 million and $3 million, the rate is 4% of the full market value. Units valued from $3 million to $5 million face 5.25%. Properties above $5 million pay 6.5%.
Conquest's analysis shows exactly 16,452 condo and co-op units fall in the $1 million to $3 million band, facing an average surcharge of $58,048. Another 722 units sit in the $3 million to $5 million range with average surcharges of $192,575.
Primary Residence Exemptions for LLC Members
LLC members can claim primary residence exemptions if they or immediate family members use the unit as their primary residence. Immediate family includes spouses, children, siblings, parents, grandparents, and grandchildren.
The exemption also applies if the unit houses a 12-month arm's-length natural-person tenant. Professional tax guidance indicates the look-through rule means these exemptions must be documented at the beneficial owner level, not the entity level.
Consider a member of an LLC that owns a $2 million Tribeca condo. If that member's primary residence is in Connecticut and the unit serves as a weekend home, the LLC would face a $80,000 annual surcharge (4% of $2 million market value). The member cannot claim the primary residence exemption.
Filing Requirements and Documentation
The exemption application deadline is October 6, 2026, according to extensions announced by Mayor Mamdani and DOF Commissioner Lee. This deadline applies to all property owners who received DOF notices, including LLC-owned units.
Professional sources indicate that entity-owned properties require look-through documentation to establish the beneficial owner's primary residence status. The specific documentary requirements for LLC exemption filings were not detailed in available regulatory guidance.
Property owners have 30 days from a notice's transmission date to appeal DOF's non-primary residence determination. First surcharge payments are due January 1, 2027.
Geographic Distribution of Exposure
Manhattan dominates the exposure with 20,065 total units above the thresholds. This includes 16,709 condos and co-ops plus 3,356 houses. Brooklyn follows with 3,960 units above the thresholds, split between 3,311 houses and 649 condos and co-ops.
The highest concentrations appear in Manhattan ZIP codes 10019 (975 exposed condo and co-op units) and 10013 (1,751 units). These areas include many buildings with significant LLC ownership for privacy or estate planning purposes.
Outside Manhattan, Brooklyn houses represent the largest exposure category with 3,311 units above the $5 million threshold. The outer boroughs show minimal condo and co-op exposure, with Queens recording just eight units above $1 million.
Phase Two Changes Starting 2028
Beginning July 1, 2028, the law shifts condo and co-op valuations toward comparable sales methodology and moves these properties to the lower rate schedule currently applied to houses. This could reduce surcharges for many LLC-owned units.
The Phase Two structure would apply rates of 0.8% for $5 million to $15 million, 1.05% for $15 million to $25 million, and 1.3% above $25 million. The current $1 million threshold for condos and co-ops would rise to $5 million.
LLC members planning long-term ownership should factor these changes into their holding strategies. A $2 million condo facing $80,000 annually under Phase One rates would likely owe nothing under Phase Two's $5 million threshold.
Next Steps for LLC Owners
Property owners should verify their units' DOF market values and potential surcharge exposure before the October 6 exemption deadline. The Comptroller projected roughly $500 million in annual revenue from the surcharge across all ownership structures.
LLC members claiming primary residence exemptions should gather documentation establishing their beneficial ownership and residence patterns. Professional tax guidance recommends consulting qualified advisors for entity-specific filing requirements.
Use our free DOF market value checker to determine your unit's exposure and calculate potential surcharge amounts based on current valuations.
Frequently asked questions
Is my LLC-owned apartment subject to the NYC pied-à-terre tax?
Yes, the pied-à-terre tax applies to LLC-owned residential units through a look-through rule that examines the natural person behind the entity. Owning a Manhattan condo through an LLC provides no automatic shield from the annual surcharge if the member uses the unit as a second home.
How much is the pied-à-terre tax on my $2 million condo owned through an LLC?
For condos valued between $1 million and $3 million, the rate is 4% of the full DOF market value. A $2 million condo would face an $80,000 annual surcharge if it doesn't qualify for the primary residence exemption.
Can I claim a primary residence exemption for my LLC-owned unit?
LLC members can claim primary residence exemptions if they or immediate family members use the unit as their primary residence. The exemption must be documented at the beneficial owner level, not the entity level, and the application deadline is October 6, 2026.