Stay lifts uncertainty for city revenue
The Appellate Division, Second Department, stayed a lower-court order and allowed New York City to continue its pied-à-terre tax rollout while the legal challenge proceeds, according to the court's Thursday order. The surcharge took effect July 1, 2026, and applies to condominiums and cooperatives with Department of Finance market values above $1 million and to one-, two- and three-family houses above $5 million when the property is not the owner's primary residence.
The stay means the city may continue to assess and collect the tax during litigation. The Department of Finance has set rates of 4 percent, 5.25 percent and 6.5 percent of market value for condominiums and cooperatives in three tiers, and 0.8 percent, 1.05 percent and 1.3 percent for houses, according to the final rules published by the agency.
A $7 million condominium used as a second home would face an annual surcharge of $280,000 under the 4 percent minimum rate for condos over $1 million, calculated on the Department of Finance market value rather than assessed value or sale price.
Exemption deadline has passed
The Department of Finance said the exemption deadline for tax year 2026–27 was October 13, 2026, according to a notice posted by the New York City Council. Owners who missed that date and use the property as a primary residence will need to wait until the next filing window to claim relief.
The surcharge does not apply to properties where the owner or the owner's spouse, domestic partner or dependent child uses the unit as a primary residence for at least six months of the tax year. Owners must file an annual exemption application with supporting documentation.
Phase Two lowers threshold in 2028
On July 1, 2028, the tax enters a second phase in which the $5 million threshold will apply to all residential property types, according to the Department of Finance final rules. The city has not yet published the methodology it will use to calculate bills under Phase Two, leaving owners of properties between $1 million and $5 million uncertain whether relief will arrive or rates will change.
The stay does not resolve the merits of the legal challenge. Oral argument and a decision on the underlying case remain pending.
What to do now
Owners who believe they may owe the surcharge can check whether their property falls above the current thresholds using the free address lookup at piedaterretax.nyc. The tool returns the Department of Finance market value, the applicable rate and an estimate of the annual bill.
Owners who use the property as a primary residence and missed the October 13 deadline should mark the next filing window on their calendar. Those who do not qualify for an exemption and are considering a sale before Phase Two takes effect in 2028 should model the cumulative cost of two years of surcharge payments against transaction costs and potential market-value changes.
Frequently asked questions
What is the threshold for the NYC pied-à-terre tax on condos and co-ops?
The surcharge applies to condominiums and cooperatives with Department of Finance market values above $1 million when the property is not the owner's primary residence. The tax took effect July 1, 2026.
How much would I pay on a $7 million condo that's my second home?
A $7 million condominium used as a second home would face an annual surcharge of $280,000 under the 4 percent minimum rate for condos over $1 million, calculated on the Department of Finance market value.
Can I still get an exemption if I live in my apartment as my primary residence?
The exemption deadline for tax year 2026–27 was October 13, 2026. Owners who missed that date and use the property as a primary residence will need to wait until the next filing window to claim relief.