DOF's Complete Six-Row Rate Structure
New York City's pied-à-terre tax operates through a six-row rate table that splits properties into two distinct schedules based on building type, according to DOF's final rules adopted August 26, 2026.
Condominiums and cooperatives face rates of 4% on market values from $1 million to under $3 million, 5.25% from $3 million to under $5 million, and 6.5% at $5 million or above. One-to-three-family houses enter the tax at $5 million with rates of 0.8% from $5 million to under $15 million, 1.05% from $15 million to under $25 million, and 1.3% at $25 million or above.
The surcharge applies to the property's full market value once any threshold is crossed. A $1.2 million condo pays 4% on the entire $1.2 million, not just on the $200,000 above $1 million.
Critical Boundary Points: $1M, $3M, and $5M
The rate table's boundary language creates sharp jumps at specific dollar amounts. Properties valued at exactly $1 million enter the 4% bracket for condos and co-ops, while those at exactly $3 million jump to the 5.25% rate.
At exactly $5 million, condos and co-ops face the 6.5% rate while houses enter their first bracket at 0.8%. A $4.99 million condo pays $262,238 in surcharge; a $5 million condo pays $325,000.
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows roughly 16,500 condo and co-op units would owe the 4% rate if they are non-primary residences, compared to 722 units in the 5.25% bracket and 197 units at 6.5%.
Market Value Base, Not Assessed Value
The surcharge calculates on DOF market value, the figure listed as 'Market Value' on the Notice of Property Value. DOF's final rules state the surcharge is 'calculated as the product of a surcharge rate established by statute and the market value of the applicable property.'
This differs from regular property taxes, which use assessed value. For Class-2 condos and co-ops, assessed value typically runs about 45% of market value, but the pied-à-terre tax ignores that discount.
A Manhattan co-op with $2 million market value and $900,000 assessed value pays the surcharge on the full $2 million, generating an $80,000 bill at the 4% rate.
Condo and Co-op Schedule Breakdown
The first schedule covers condominiums and residential cooperatives citywide. Units with market values from $1 million to under $3 million pay 4% annually. Those from $3 million to under $5 million pay 5.25%.
At $5 million and above, the rate jumps to 6.5%. Conquest's analysis shows the average surcharge in this top bracket reaches $478,899, with properties ranging from $5 million penthouses to $30 million-plus trophy units.
Manhattan dominates exposure, with roughly 16,700 condo and co-op units above the $1 million threshold. Brooklyn adds another 649 units, while other boroughs contribute minimal counts.
House Schedule: Higher Thresholds, Lower Rates
One-to-three-family houses face a separate schedule starting at $5 million market value. The rates are 0.8% from $5 million to under $15 million, 1.05% from $15 million to under $25 million, and 1.3% at $25 million and above.
Manhattan leads with roughly 3,400 houses above the $5 million threshold, followed by Brooklyn with roughly 3,300 houses. The average surcharge for Manhattan houses reaches $105,610, according to Conquest's analysis.
The Bronx shows 77 houses above $5 million, while Queens and Staten Island contribute 35 and 23 houses respectively. These outer-borough figures reflect the $5 million threshold's concentration in high-value markets.
Flat Rate Application Across Full Value
Unlike marginal tax brackets, the pied-à-terre surcharge applies its rate to the property's entire market value once a threshold is crossed. DOF's rules describe the charge as 'the product of a surcharge rate established by statute and the market value of the applicable property.'
A $2.9 million condo pays 4% on the full amount, generating a $116,000 surcharge. If that same unit were valued at $3.1 million, it would pay 5.25% on the entire value, creating a $162,750 bill.
This structure creates cliff effects where small valuation increases trigger disproportionate tax jumps. Properties near boundary points face particular exposure to DOF's annual market value adjustments.
Phase Two Outlook: 2028 Schedule Changes
Beginning July 1, 2028, condos and co-ops will transition toward the house schedule's lower rates through a revaluation process based on comparable sales. The current 4%, 5.25%, and 6.5% rates represent a temporary Phase One structure.
DOF has not published the Phase Two implementation mechanics, but the law envisions condos and co-ops eventually facing the 0.8% to 1.3% range that currently applies only to houses. The transition timeline and specific procedures remain undefined.
Property owners approaching the current thresholds should monitor both their market values and DOF's Phase Two guidance, as the 2028 changes could reshape the tax landscape for non-primary residences.
Checking Your Property's Exposure
The exemption application deadline is October 6, 2026, for owners who received DOF's non-primary residence notices. Primary residence owners and those with qualifying tenants can claim exemptions to avoid the surcharge entirely.
Property owners can verify their market value and calculate potential surcharge amounts using DOF's official records. The market value figure appears on the Notice of Property Value and determines which rate bracket applies.
Conquest offers a free DOF market value and surcharge calculator to help property owners understand their exposure under the current rate table and plan for the Phase Two transition.
Frequently asked questions
Is my condo subject to the pied-à-terre tax if it's worth $1.2 million?
Yes, condominiums with market values of $1 million or above are subject to the pied-à-terre tax at a 4% rate for values from $1 million to under $3 million. Your $1.2 million condo would pay 4% on the entire $1.2 million market value, resulting in a $48,000 annual surcharge.
How much is the tax on a $5 million condo versus a $5 million house?
A $5 million condo pays 6.5% on the full value ($325,000 annually), while a $5 million house pays 0.8% on the full value ($40,000 annually). The tax uses different rate schedules for condos/co-ops versus one-to-three-family houses, with houses having lower rates but higher thresholds.
Does the tax calculate on assessed value or market value?
The pied-à-terre tax calculates on DOF market value, not assessed value. This differs from regular property taxes and means the surcharge ignores the typical 45% assessed value discount for condos and co-ops, applying the full rate to the market value shown on your Notice of Property Value.