The Five DOF Exemption Categories
New York City's pied-à-terre tax will not apply if a property serves as the primary residence of one of five categories DOF has identified: the owner, a tenant or subtenant, majority-interest holders in an owning entity, an immediate family member, or the sole beneficiary of a trust.
The Department of Finance states the property will not be subject to the surcharge if it is the primary residence of 'the owner of the property,' according to DOF's current non-primary-residence-surcharge guidance page.
A second category covers renters. DOF exempts properties that serve as the primary residence of 'a tenant or subtenant,' the agency states.
Entity ownership creates a third path. Properties owned by LLCs, corporations or partnerships avoid the surcharge when they serve as the primary residence of 'one or more individuals who collectively hold a majority interest' in the owning entity, DOF says.
Family members represent the fourth category. The exemption applies when the property is the primary residence of 'an immediate family member of the owner or majority interest holder,' according to DOF.
Trust arrangements form the final category. DOF exempts properties serving as the primary residence of 'the sole beneficiary or beneficiaries of a trust.'
Entity Rules Carry Additional Requirements
The entity exemption carries restrictions beyond DOF's summary language. The Comptroller reported that DOF's final rules require a corporation, LLC or partnership seeking the primary-residence exemption to hold either an undivided fee interest in the property or all shares of a cooperative corporation representing the dwelling unit.
This requirement narrows the practical scope of entity-based exemptions compared to individual ownership structures.
One Manhattan Co-op Owner's Arithmetic
Consider a Manhattan co-op owner whose unit carries a $1.8 million DOF market value on the July 2026 Supplemental Market Value Roll. If the unit serves as a second home rather than a primary residence, the owner would face a $72,000 annual surcharge under the 4% rate that applies to condo and co-op units valued between $1 million and $3 million.
The same owner could eliminate that liability by qualifying for any of DOF's five exemption categories. An immediate family member using the unit as a primary residence would trigger the exemption, as would a tenant making it their primary residence.
The surcharge calculation uses DOF's market value figure directly. The $1.8 million market value generates the full $72,000 liability once the unit crosses the $1 million threshold for condos and co-ops.
Deadlines and Market Exposure
Property owners who received DOF notices have until October 6, 2026 to submit exemption applications, following two deadline extensions by Mayor Mamdani and DOF Commissioner Lee from the original dates in August.
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows roughly 24,000 condo, co-op and house units citywide would owe the surcharge if they serve as non-primary residences. Most are primary residences and owe nothing.
Manhattan accounts for roughly 17,000 condo and co-op units above the $1 million threshold, with an average potential surcharge of $68,559 for units that lack a qualifying exemption.
Frequently asked questions
Is my apartment subject to NYC's pied-à-terre tax if my family member lives there?
Your property is exempt from the pied-à-terre tax if it serves as the primary residence of an immediate family member of the owner or majority interest holder. This family member exemption is one of five categories that DOF recognizes for avoiding the surcharge.
How much is the tax on a $1.8 million Manhattan co-op used as a second home?
A Manhattan co-op valued at $1.8 million would face a $72,000 annual surcharge under the 4% rate that applies to condo and co-op units valued between $1 million and $3 million. The surcharge calculation uses DOF's market value figure directly once the unit crosses the $1 million threshold.
Does the pied-à-terre tax apply if I rent out my condo to a tenant?
Your property is exempt from the pied-à-terre tax if it serves as the primary residence of a tenant or subtenant. DOF exempts properties where tenants use the unit as their primary residence, making this one of the five qualifying exemption categories.