What Is the NYC Pied-à-Terre Tax?

The one-paragraph version

The NYC pied-à-terre tax is an annual surcharge on New York City homes that are not anyone's primary residence. It was passed by the State Legislature on May 27, 2026, signed by Governor Hochul on May 28, 2026 as part of the FY 2026–27 state budget, and has applied citywide since July 1, 2026. It is billed with your property taxes, collected like them (liens included), and scheduled to sunset on June 30, 2031 unless Albany renews it. The official name in the statute and on Department of Finance notices is the non-primary residence property surcharge; "pied-à-terre tax" and "second-home tax" are the names everyone actually uses.

Who pays it

Two groups of properties are covered, both measured by the Department of Finance market value — the "Market Value" line on your Notice of Property Value, not your purchase price and not your assessed value:

• Condominiums and co-op apartments (Tax Class 2) with a DOF market value above $1,000,000.
• One- to three-family houses (Tax Class 1) with a DOF market value above $5,000,000.

A covered property owes the surcharge for any year in which it is not occupied for more than half the year as the primary residence of a covered owner, an immediate family member of an owner (spouse, child, sibling, parent, grandparent or grandchild), or a tenant under an arm's-length lease of at least 12 months who makes it their primary residence. Ownership through an LLC, partnership, corporation or trust does not shield the home: the law looks through to the beneficial owners. A vacant unit, a seasonal unit, and a unit used for short stays or Airbnb-style rentals all count as non-primary.

How much it costs

The surcharge is a flat rate on the full DOF market value once the value crosses a threshold — not a marginal rate on the excess. For condos and co-ops in Phase 1 (July 1, 2026 to June 30, 2028): 4% of market value from $1M to $3M, 5.25% from $3M to $5M, and 6.5% above $5M. For one- to three-family houses: 0.8% from $5M to $15M, 1.05% from $15M to $25M, and 1.3% above $25M. A condo with a DOF market value of $2.4 million that is nobody's primary residence therefore owes about $96,000 a year; a $7 million one owes about $455,000 a year. The calculator runs the exact figure, and the building database shows which buildings sit above the line.

From July 1, 2028, Phase 2 moves condos and co-ops to a market-value model that DOF has not yet fully specified; our Phase 2 preview explains what is known.

The exemption, and the deadline

If the home is a primary residence under one of the three routes above, it is exempt — but for a property the city has placed on its surcharge roll, the owner has to file an exemption application and document it (a tax return showing the address, a DMV record, a qualifying 12-month lease). DOF began mailing "you may be subject to the surcharge" notices in August 2026. The filing deadline has moved three times and now stands at October 13, 2026 for every property type, regardless of the date printed on an individual letter. A property on the roll with no approved exemption is billed the surcharge on the property tax bill due January 1, 2027. Our notice guide walks through the response step by step, and the exemptions page covers each route in detail.

The court fight, briefly

The surcharge itself is law; what is being litigated is how the city rolled it out. On September 29, 2026 a Staten Island judge annulled the rollout in O'Brien v. City of New York, finding the roll overinclusive and the notices defective; the city appealed the next day, which automatically stayed the order, so the roll, the notices and the deadline remain in force while the Appellate Division considers the case. Separate constitutional challenges have been filed. None of this has cancelled the tax, and no DOF statement has moved the January 1, 2027 bill date. The legal challenges tracker is kept current.

Three ways out — and the expensive default

1. Make it primary. You or an immediate family member occupy the home more than half the year, with real documentation. This changes your state and city tax picture, so coordinate with your CPA.
2. Lease it for 12+ months. An arm's-length lease to a tenant who makes it their primary residence removes the surcharge and produces income — at today's rents, often more than the surcharge would have cost.
3. Sell. A recurring 4%–6.5% of market value changes the math of holding a unit you rarely use. Our sell-vs-rent analysis puts numbers on it.

The default — doing nothing — means paying the surcharge every year on top of ordinary property tax, with no abatement or credit to offset it.

Questions owners ask

Is the pied-à-terre tax the same as the mansion tax?

No. The mansion tax is a one-time transfer tax paid by the buyer at closing. The pied-à-terre tax is an annual surcharge paid for as long as the home is a non-primary residence. The comparison page sets them side by side.

Does it apply outside Manhattan?

Yes. It applies citywide — all five boroughs — to any covered property above the thresholds. In practice most affected condos are in Manhattan and brownstone Brooklyn, because that is where DOF market values exceed $1 million.

I own through an LLC. Am I exempt?

No. The law treats the majority owner of an LLC, partnership, corporation or trust as the covered owner. Where no individual holds a majority (for example, a family LLC split evenly among siblings), the property can be surcharged no matter who lives there unless a qualifying tenant occupies it. More on entities here.

What is the deadline to claim the exemption?

October 13, 2026, extended by DOF on October 6 from the previous October 6 date. It is the same for condos, co-ops and houses and overrides any earlier date on your letter.