What changed on October 13
The New York City Department of Finance extended the pied-à-terre tax exemption deadline three times—from August 21 to September 18, then to October 6, and finally to October 13, 2026. That window is now closed. Owners who received a non-primary-residence notice and did not file an exemption application by October 13 are locked into fiscal-year 2027 exposure unless they qualify for the lease-based exemption or successfully appeal a DOF determination within thirty days of its transmission.
The surcharge takes effect for the fiscal year beginning July 1, 2026. The first payment is expected with the January 2027 property-tax installment, according to the NYC Comptroller's October 14 report. The practical choice is now whether to pay the surcharge, lease the unit under the twelve-month exemption, or sell before the first bill arrives.
Path one: pay the surcharge through Phase 2
The surcharge is an annual charge calculated on the DOF-determined market value—not the assessed value—of covered residences. For condominiums and cooperatives in Phase 1 (fiscal years 2027 through 2029), the rate is 4 percent on market values between $1 million and $3 million, 5.25 percent on values between $3 million and $5 million, and 6.5 percent on values of $5 million or more. The rate applies to the full market value once the threshold is crossed, not only to the portion above it.
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 16,709 condominium and cooperative units above the $1 million threshold, with a median surcharge of $53,665. Brooklyn has 649 condominium and cooperative units exposed, with a median surcharge of $46,763.
A unit valued at $2.4 million owes $96,000 annually in Phase 1. A unit valued at $4.8 million owes $252,000. A unit valued at $7 million owes $455,000. These figures recur each year the unit remains a non-primary residence.
Phase 2 begins July 1, 2028. DOF will revalue condominium and cooperative units using comparable sales, and the rate schedule will shift toward the lower brackets currently applied to one- to three-family homes—0.8 percent on values between $5 million and $15 million, 1.05 percent on values between $15 million and $25 million, and 1.3 percent on values of $25 million or more. The exact Phase 2 liability for any given unit cannot be calculated today because the revaluation has not occurred.
Path two: lease it under the twelve-month exemption
A residence leased to a natural-person tenant under a bona fide lease of at least one year is exempt from the surcharge if the tenant uses the unit as the tenant's New York City primary residence. The exemption does not require that the lease be signed before October 13; it requires that the lease meet the statutory conditions.
The unresolved question is timing. The sources reviewed do not establish whether DOF will remove the fiscal-year 2027 surcharge before billing, cancel a bill after issuance, or require payment followed by an adjustment or refund. The surcharge is imposed for the fiscal year beginning July 1, 2026, and the first bill is expected in January 2027. An owner who signs a qualifying lease in November 2026 fits the stated exemption category, but the administrative path for reporting that change mid-year is not established in the available guidance.
Owners using this route should preserve the executed lease and evidence that the tenant has established the unit as the tenant's primary residence. The NYC Department of Finance's surcharge page is the appropriate starting point for confirming how a post-deadline lease is reported and whether the fiscal-year 2027 bill will be adjusted before issuance.
Path three: sell before the first bill
Selling before the first bill may reduce future exposure, but the reviewed sources do not establish that a pre-billing closing automatically extinguishes the fiscal-year 2027 surcharge. The surcharge is imposed for the fiscal year beginning July 1, 2026. Allocation between buyer and seller, if any, may depend on the assessment roll, billing status, closing agreement, and applicable law.
A basic bridge calculation for net sale proceeds is contract price minus existing mortgage payoff, brokerage commission, seller closing costs, transfer taxes, and other adjustments. For NYC residential sales, the seller's transfer-tax calculation generally includes NYC real property transfer tax of 1.425 percent on transfers above $500,000, New York State real estate transfer tax of 0.40 percent, and an additional NYC residential transfer tax of 0.25 percent on transfers of at least $3 million.
On a $12 million sale, transfer taxes alone total roughly $249,000. A six-percent brokerage commission adds $720,000. If the existing mortgage payoff is $4 million and other closing costs total $50,000, net proceeds are approximately $6.98 million. Whether that figure exceeds the present value of paying the surcharge annually through Phase 2 depends on the owner's holding period, the Phase 2 revaluation, and the opportunity cost of capital.
What to check now
Owners should confirm their unit's DOF-determined market value and calculate the Phase 1 surcharge using the applicable rate. Conquest's free DOF market-value and surcharge checker pulls the July 2026 Supplemental Market Value Roll figure for any address and applies the correct Phase 1 bracket. The tool is available at piedaterretax.nyc.
The first bill is expected with the January 2027 property-tax installment. Owners who receive a DOF determination have thirty days from its transmission date to appeal. The NYC Department of Finance's surcharge page at nyc.gov/site/finance/taxes/pied-a-terre-tax.page is the official source for exemption, valuation, notice, and appeal procedures.
Frequently asked questions
How much is the pied-à-terre tax on my apartment if it's valued at $2.4 million?
A unit valued at $2.4 million owes $96,000 annually in Phase 1 (fiscal years 2027 through 2029). The surcharge is calculated on the DOF-determined market value using a 4 percent rate for values between $1 million and $3 million, applied to the full market value once the threshold is crossed.
Can I avoid the pied-à-terre tax if I rent out my apartment now?
A residence leased to a natural-person tenant under a bona fide lease of at least one year is exempt from the surcharge if the tenant uses the unit as their New York City primary residence. The exemption does not require that the lease be signed before the October 13 deadline, but the administrative path for reporting a post-deadline lease and whether the fiscal-year 2027 bill will be adjusted before issuance is not established in available guidance.
Does selling my apartment before January 2027 eliminate the pied-à-terre tax bill?
Selling before the first bill may reduce future exposure, but the reviewed sources do not establish that a pre-billing closing automatically extinguishes the fiscal-year 2027 surcharge. The surcharge is imposed for the fiscal year beginning July 1, 2026, and allocation between buyer and seller may depend on the assessment roll, billing status, closing agreement, and applicable law.