The one-year lease test
New York's non-primary-residence surcharge—effective July 1, 2026 and running through June 30, 2031—applies to high-value residential properties that are not used as a primary residence. A qualifying tenant's bona fide, arm's-length lease can exempt the property. A short-term rental arrangement generally cannot.
Under Tax Law Article 30-C and the Department of Finance's implementing rules, a property may qualify for the primary-residence exemption when it is used as the tenant's primary residence under a bona fide arm's-length lease with a term of at least one year. The tenant must actually use the unit as a primary residence. The exemption does not apply merely because the owner has signed a lease, the tenant occasionally stays there, the unit is advertised as available for longer occupancy, or the owner reports rental income.
A lease of exactly 12 months satisfies the stated minimum term, assuming it is bona fide, arm's-length, and the tenant uses the property as a primary residence. A shorter lease does not meet the one-year statutory lease condition.
Why Airbnb and short-term stays do not qualify
The sources establish the one-year minimum for the qualifying tenant-lease exemption but do not identify a special Airbnb exception to that rule. A typical Airbnb or other short-term-stay arrangement—nightly, weekly, or month-to-month—does not meet the stated 'bona fide arm's-length lease for a term of not less than one year' condition.
Local Law 18 is a separate regulatory issue. New York's short-term-rental rules generally require hosts and booking services to comply with registration and occupancy restrictions; they do not convert short stays into a qualifying one-year primary-residence lease. Compliance with Local Law 18 does not, by itself, establish an Article 30-C exemption.
The available sources do not establish that every short-term rental is automatically taxable in every factual situation. The unresolved question is whether a particular occupancy arrangement could satisfy the statutory primary-residence requirements despite not being described as a conventional lease. The professional sources consistently identify the at-least-one-year arm's-length lease as the relevant safe category.
Who qualifies for the primary-residence exemption
DOF's current exemption page states that the surcharge generally does not apply when the property is the primary residence of the owner, a tenant or subtenant, qualifying immediate family members (spouse, child, sibling, parent, grandparent, or grandchild), or individuals who collectively hold a majority interest in an entity owning the property.
The relevant tenant must actually use the unit as a primary residence. The statutory exemption does not apply merely because the owner has signed a lease or the tenant occasionally stays there.
Current rates, thresholds, and valuation base
The surcharge applies to covered Class 1 residential property, residential condominium units, and residential cooperative dwelling units that exceed the applicable market-value threshold and do not serve as a primary residence. The surcharge is calculated on the property's market value—the 'Market Value' line on the Notice of Property Value—not assessed value.
For condominiums and cooperatives, the surcharge is 4 percent if market value is $1 million to $3 million, 5.25 percent if $3 million to $5 million, and 6.5 percent if $5 million or more. For one- to three-family homes, the surcharge is 0.8 percent if market value is $5 million to $15 million, 1.05 percent if $15 million to $25 million, and 1.3 percent if $25 million or more.
The surcharge is flat: once market value clears the threshold, the bracket rate applies to the full market value, not only the excess. A condominium with a market value of $1.5 million would owe $60,000 annually (4 percent of $1.5 million) if it is a non-primary residence and no exemption applies.
Deadlines and appeal rights
The exemption application deadline is October 13, 2026 (extended by DOF on October 6, 2026; supersedes all earlier dates). The extension applies to everyone who received a DOF 'You may be subject to...' notice.
DOF mailed initial notices on July 22, 2026 to owners whose records did not establish primary-residence status. The original exemption deadline in those notices was August 21, 2026 for owners generally and August 24, 2026 for cooperative units. DOF extended the deadline to September 18, 2026, then extended it again to October 6, 2026, and most recently to October 13, 2026.
The initial-determination appeal rule is generally 30 days after DOF transmits the notice. If DOF sends no notice, the appeal period runs 30 days after the surcharge first appears on the assessment roll. The NYC Tax Commission's current appeal page identifies March 1, 2027 and March 15, 2027 deadlines for Tax Class 2 and Tax Class 1 appeals, respectively, for the 2026/27 and 2027/28 tax years.
Recent litigation and rollout challenges
On September 29, 2026, New York Supreme Court Justice Wayne M. Ozzi reportedly ruled that DOF's rollout was arbitrary, capricious, and unlawful. The reported ruling directed the City to cancel previously mailed notices, remove the existing supplemental roll, and make individualized initial determinations using available tax information before issuing new notices.
The City filed a notice of appeal on September 29, 2026, according to Rosenberg & Estis, and reportedly continued implementing the surcharge while the appeal remained pending. The available sources do not establish that the litigation has been finally resolved. The validity and administration of the existing rollout remain unsettled.
How many properties are exposed
Conquest's analysis of DOF's July 2026 Supplemental Market Value Roll shows roughly 24,000 units citywide that would owe the surcharge if the unit is a non-primary residence. Most are primary residences and owe nothing. These are exposure figures, not a forecast of what the city will collect.
Manhattan accounts for roughly 17,000 condominium and cooperative units over the $1 million threshold, with an average surcharge of $68,559 if non-primary. Brooklyn has roughly 3,300 houses over the $5 million threshold, with an average surcharge of $52,630 if non-primary. The Bronx has 77 houses over the threshold; Queens has 35 houses and eight condominiums or cooperatives; Staten Island has 23 houses.
The top ZIP codes for condominium and cooperative exposure are 10019 (975 units), 10012 (932 units), and 10013 (1,751 units). Roughly 4,400 units have a market value within $100,000 of the $1 million threshold; roughly 10,000 are within $200,000.
What to watch next
The City's appeal of the September 29, 2026 ruling remains pending. DOF has not announced whether it will issue new individualized notices or continue with the existing supplemental roll. The first payment is due January 1, 2027, assuming the surcharge survives the litigation.
Owners who received a DOF notice and believe they qualify for the primary-residence exemption—whether because they live in the unit, a qualifying family member does, or a tenant does under a bona fide arm's-length lease of at least one year—must file by October 13, 2026. Owners who did not receive a notice but whose property exceeds the threshold should confirm their status with DOF.
Conquest's free pied-à-terre tax checker shows whether your property's DOF market value puts it above the surcharge threshold and estimates the annual surcharge if it is a non-primary residence. This is educational content from Conquest, a licensed brokerage, and is not legal or tax advice.
Frequently asked questions
Does renting my apartment on Airbnb qualify it for the pied-à-terre tax exemption?
No, typical Airbnb or short-term rental arrangements do not meet the one-year lease requirement for the primary-residence exemption. The exemption requires a bona fide arm's-length lease with a term of at least one year, and the tenant must actually use the unit as a primary residence.
How much is the pied-à-terre tax on a $1.5 million condominium?
A condominium with a market value of $1.5 million would owe $60,000 annually (4 percent of the full $1.5 million market value) if it is a non-primary residence and no exemption applies. The surcharge is flat: once market value clears the $1 million threshold, the 4 percent rate applies to the entire market value, not just the excess.
Is a 12-month lease long enough to qualify my apartment for the primary-residence exemption?
Yes, a lease of exactly 12 months satisfies the one-year minimum term required for the exemption, assuming it is bona fide, arm's-length, and the tenant actually uses the property as a primary residence. Shorter leases do not meet the statutory one-year lease condition.