The mansion tax is a closing-time buyer charge
New York State's supplemental mansion tax applies to residential real-property transfers in New York City when the consideration is $1 million or more. The purchaser pays it once, at closing, in addition to the ordinary New York State and NYC transfer taxes.
The rate is tiered. A $5 million purchase falls in the 2.25 percent bracket, producing a mansion tax of $112,500. That is the end of the obligation. The tax is calculated from the taxable consideration and does not recur.
The rate schedule runs from 1.00 percent on consideration between $1 million and $2 million to 3.90 percent on consideration of $25 million or more. The mansion tax has been in place since 1989 and was last amended in 2019 to add the higher brackets.
The pied-à-terre surcharge is an annual levy on DOF market value
Article 30-C of the New York Tax Law authorizes NYC's annual surcharge on certain non-primary residences. Signed May 28, 2026, the surcharge took effect July 1, 2026 and is scheduled to sunset June 30, 2031.
The surcharge is based on the Department of Finance's market value—the figure that appears on the Notice of Property Value each year—not the purchase price. For condominiums and cooperatives, DOF market value is distinct from assessed value; assessed value for Class 2 properties is roughly 45 percent of market value and is used only to calculate the regular property tax.
The adopted DOF rules state that the surcharge is "calculated as the product of a surcharge rate established by statute and the market value of the applicable property." Co-op unit values are derived from market value via the statutory share ratios. There is no carve-out making condos or co-ops assessed-value-based in the first phase.
For property-tax years 2026–27 and 2027–28, the rates are 4.00 percent on condominium or cooperative units with market value between $1 million and $3 million, 5.25 percent on units between $3 million and $5 million, and 6.50 percent on units at or above $5 million. One-, two-, or three-family homes face lower rates: 0.80 percent on market value between $5 million and $15 million, 1.05 percent between $15 million and $25 million, and 1.30 percent at or above $25 million.
A $5 million purchase produces very different annual bills
A buyer who closes on a $5 million property pays the $112,500 mansion tax once. The pied-à-terre surcharge depends on what DOF determines the market value to be and whether the property is a house or a condo.
If DOF's market value is exactly $5 million and the property is a qualifying non-primary residence, a one- to three-family home would owe $40,000 per year under the 0.80 percent rate. A condominium or cooperative unit would owe $325,000 per year under the 6.50 percent rate.
Those calculations assume the property is subject to the surcharge and that no exemption applies. The statute provides exemptions for primary residences of the owner or immediate family—spouse, child, sibling, parent, grandparent, or grandchild—and for units occupied by a 12-month arm's-length natural-person tenant.
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows that roughly 24,000 units citywide would be exposed to the surcharge if they are non-primary residences. Most are primary residences and owe nothing. In Manhattan, 16,709 condo and co-op units fall above the $1 million threshold; the median surcharge for those units would be $53,665 if they are non-primary.
Non-primary status is determined as of the January 5 taxable status date preceding the fiscal year, not by how much of the year the owner spent in the unit. Owners who received a DOF notice stating they may be subject to the surcharge had until October 13, 2026 to apply for an exemption for tax year 2026–27. DOF extended the deadline twice; the original date was August 21, 2026, then September 18, 2026, and finally October 13, 2026.
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The first surcharge payment is due January 1, 2027. Owners may appeal an initial determination within 30 days after the date the notice of the initial determination is transmitted, according to the adopted DOF rules.
From July 1, 2028, the statute directs DOF to revalue condominiums and cooperatives on comparable sales, moving them toward the lower rate schedule that currently applies only to one- to three-family homes. That phase-two schedule has not yet been published in final form.
The Office of the Comptroller projected the surcharge would generate roughly $500 million per year. The statute sunsets June 30, 2031 unless extended by later legislation.
Conquest offers a free DOF market-value and surcharge calculator that shows whether a specific property falls above the threshold and estimates the annual bill. This article is educational content from Conquest, a licensed brokerage, and is not legal or tax advice.
Frequently asked questions
Is the mansion tax paid every year on my NYC apartment?
No, the mansion tax is paid once at closing when you purchase the property. It does not recur and is calculated from the purchase price, not an annual valuation.
How much is the pied-à-terre tax on a $5 million condo?
If DOF's market value is exactly $5 million and the condo is a qualifying non-primary residence, the annual surcharge would be $325,000 under the 6.50 percent rate for units at or above $5 million. The surcharge is based on DOF market value, not purchase price, and is paid every year.
Does the pied-à-terre surcharge apply if my family member lives in the apartment?
The statute provides exemptions for primary residences of the owner or immediate family—spouse, child, sibling, parent, grandparent, or grandchild. If an immediate family member uses the unit as their primary residence, it may qualify for an exemption.