What exactly is NYC's pied-à-terre tax?
New York City's pied-à-terre tax is an annual surcharge on non-primary residences worth $1 million or more, effective July 1, 2026 through June 30, 2031.
The Department of Finance describes it as an additional tax calculated by multiplying a statutory rate by the property's market value. For cooperative units, the surcharge applies to the market value of the individual dwelling unit, not the building.
The tax targets qualifying Class 1 homes, condominium units, and cooperative dwelling units that are not used as a primary residence by an owner, immediate family member, or qualifying tenant.
Which properties are subject to the surcharge?
The surcharge applies to properties above specific DOF market value thresholds, not purchase prices or assessed values.
Condominium and cooperative units face the tax if their DOF market value reaches $1 million or more. One-, two-, and three-family homes are subject to the surcharge only if their DOF market value exceeds $5 million.
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. Manhattan accounts for roughly 20,000 of those units, with Brooklyn adding about 4,000 more.
How much does the surcharge cost?
The surcharge uses flat rates applied to the full DOF market value once a property crosses the threshold.
For condominiums and cooperatives in the first phase (2026-2028): 4% if market value is $1 million to $3 million, 5.25% for $3 million to $5 million, and 6.5% for $5 million and above.
Houses face lower rates: 0.8% for $5 million to $15 million, 1.05% for $15 million to $25 million, and 1.3% for $25 million and above.
A Manhattan condominium with a $2 million DOF market value would face an $80,000 annual surcharge. A $6 million unit would owe $390,000 per year.
What changes in Phase 2?
Starting July 1, 2028, condominium and cooperative rates shift toward the lower house schedule based on comparable sales data.
The statute contains Phase 2 rates but DOF has not published the complete transition mechanism. The change aims to align condo and co-op rates with the 0.8% to 1.3% range that applies to houses from the start.
Who qualifies for exemptions?
Properties used as a primary residence by specific people avoid the surcharge entirely.
Qualifying primary residents include the owner, immediate family members (spouse, child, sibling, parent, grandparent, or grandchild), and tenants under arm's-length leases of at least 12 months. For entity-owned properties, DOF looks through to majority interest holders.
Primary residence status is determined as of January 5 preceding the tax year, not by how much time someone spends in the unit during the year.
When do owners need to respond to DOF?
DOF mailed notices on July 22, 2026 to owners whose records did not establish primary residence status.
The exemption application deadline is October 6, 2026, after two extensions from the original August dates. Owners have 30 days from their notice's transmission date to appeal non-primary determinations.
Market value challenges go to the Tax Commission under separate procedures. A Staten Island judge ordered the City to restart the rollout on September 29, 2026, but the City appealed and the program continues while litigation proceeds.
When does payment begin?
The surcharge takes effect for the 2026-2027 tax year, but DOF has not published the first payment due date in official guidance.
Regular property tax abatements do not offset the surcharge, which operates as a separate levy on the same market value base.
The Comptroller projected roughly $500 million in annual revenue, though actual collections will depend on how many properties qualify for primary residence exemptions.
Frequently asked questions
Is my apartment subject to the NYC pied-à-terre tax?
Your apartment is subject to the surcharge if it's a condominium or cooperative unit with a DOF market value of $1 million or more and is not used as a primary residence by you, an immediate family member, or a qualifying tenant. The tax applies to non-primary residences effective July 1, 2026 through June 30, 2031.
How much is the pied-à-terre tax on a $2 million condo?
A Manhattan condominium with a $2 million DOF market value would face an $80,000 annual surcharge. For condominiums and cooperatives in the first phase (2026-2028), the rate is 4% for market values between $1 million to $3 million.
Does the pied-à-terre tax apply to houses?
Yes, but only to one-, two-, and three-family homes with DOF market values exceeding $5 million. Houses face lower rates than condos and co-ops: 0.8% for $5 million to $15 million, 1.05% for $15 million to $25 million, and 1.3% for $25 million and above.