Who has to pay the pied-à-terre tax?

Owners of New York City residential property that is NOT a primary residence — of the owner, an immediate family member (spouse, child, sibling, parent, grandparent or grandchild), or a qualifying tenant. It covers Class 1 homes (1–3 family) above $5 million market value and Class 2 condo and co-op units above $1 million assessed value.

What are the rates for townhouses and 1–3 family homes?

Based on a five-year average market value: the first $5 million is exempt, then 0.8% on $5M–$15M, 1.05% on $15M–$25M, and 1.3% above $25M.

How do I know if my condo is over the $1 million threshold?

The condo/co-op threshold uses the Department of Finance assessed value, not your purchase price. Check the assessed value on your annual Notice of Property Value (NOPV) or property tax bill at nyc.gov/finance. Many multi-million-dollar apartments have assessed values well below $1M — and some do not. This is the single most misunderstood part of the law, and it is worth having a professional confirm your exposure.

How can I legally avoid the pied-à-terre tax?

Three main paths: (1) Make the home a primary residence — yours or an immediate family member's (spouse, child, sibling, parent, grandparent, grandchild) — occupied more than half the year. (2) Rent it out on an arm's-length lease of at least 12 months to a tenant who uses it as their primary residence. (3) Sell the property. A vacant unit 'available for rent' does not qualify — an actual qualifying lease is required.

Does the tax apply to homes owned through an LLC or trust?

Yes — the law looks through entities. For trusts, beneficial owners are treated as covered owners; for LLCs, partnerships and corporations, majority-interest holders are. Caution: where no individual holds a majority interest, the property can be subject to the surcharge regardless of who lives there, unless an arm's-length tenant occupies it as a primary residence.

When is the first payment due and what notices will I get?

The Department of Finance must mail initial non-primary-residence notices by August 30, 2026. Owners can rebut by attesting and documenting primary residence (e.g., a tax return showing the address, or a qualifying lease). The first year's surcharge is due January 1, 2027; after that it is billed semi-annually with regular property taxes. Standard abatements and exemptions do NOT offset the surcharge.

How much revenue will the tax raise?

The NYC Comptroller's office has projected on the order of $500 million per year from the surcharge, dedicated to city priorities under the FY 2026–27 budget agreement.

Should I sell my New York pied-à-terre or rent it out?

It depends on your assessed value, carrying costs, rental income potential and how you use the home. For many owners a 12-month lease eliminates the surcharge while producing income; for others, current market pricing makes a sale more attractive than paying a recurring 4–6.5% surcharge on assessed value. A senior agent can model both paths for your specific unit at no cost.

NYC Pied-à-Terre Tax (2026): Rates, Exemptions & What Second-Home Owners Can Do

Q: Is the NYC pied-à-terre tax actually law now?

Yes. After years of failed proposals, the New York State Legislature passed the surcharge on May 27, 2026 and Governor Hochul signed it on May 28, 2026 as part of the FY 2026–27 state budget. It took effect July 1, 2026 and is scheduled to sunset June 30, 2031 unless extended.

Q: What are the pied-à-terre tax rates for condos and co-ops?

During Phase 1 (July 1, 2026 – June 30, 2028), condo and co-op units pay a surcharge on assessed value: 4% on assessed value between $1M–$3M, 5.25% between $3M–$5M, and 6.5% above $5M. Important: this is the Department of Finance ASSESSED value (an income-based figure, typically far below sale price), not your market price. From July 1, 2028 (Phase 2), condos and co-ops shift to a market-value model with rates of roughly 0.8%–1.3% above a $5M threshold.

Estimated surcharge liability accrued by NYC second-home owners since July 1, 2026

Projection based on the NYC Comptroller's estimate of ≈$500 million per year in pied-à-terre surcharge revenue, accruing continuously from the July 1, 2026 effective date. Illustrative, not an official figure.

What happened

A tax ten years in the making is now law

On May 27, 2026 the New York State Legislature passed an annual surcharge on New York City homes that are not a primary residence — the "pied-à-terre tax" first proposed back in 2014. Governor Hochul signed it on May 28, 2026 as part of the FY 2026–27 state budget. It applies citywide from July 1, 2026 and sunsets June 30, 2031 unless renewed.

The surcharge targets Class 1 homes (1–3 family) worth more than $5 million and Class 2 condominium and co-op units with a Department of Finance assessed value above $1 million. It is billed with your property taxes, and — critically — no abatement, credit or exemption you currently receive will offset it.

If you own a Manhattan apartment you use a few weeks a year, a Brooklyn brownstone kept for family visits, or an investment unit sitting vacant between uses, this law is aimed at you. The NYC Comptroller projects it will raise roughly $500 million per year.

Signed: May 28, 2026
Effective: July 1, 2026
DOF notices by: Aug 30, 2026
First payment: Jan 1, 2027
Top condo rate: 6.5% of assessed value
Sunsets: June 30, 2031

The numbers

Rates & thresholds

Condos & co-ops — Phase 1 (Jul 1, 2026 – Jun 30, 2028)
DOF assessed value	Annual surcharge
First $1,000,000	Exempt
$1M – $3M	4%
$3M – $5M	5.25%
Above $5M	6.5%

The most misunderstood detail in the entire law: these brackets use the Department of Finance assessed value — an income-based figure on your NOPV that is usually far below what your apartment would sell for. A $4M condo may be under the threshold; a $2.5M unit in some buildings may not. Do not guess. We will look it up for you, free.

1–3 family homes (five-year average market value)
Market value	Annual surcharge
First $5,000,000	Exempt
$5M – $15M	0.8%
$15M – $25M	1.05%
Above $25M	1.3%

Phase 2 — July 1, 2028: condos and co-ops move off assessed value onto a DOF market-value model, with brackets aligned to the house schedule above. Owners just under today's thresholds may be pulled in — and vice versa. Exposure is worth re-checking annually.

Who owes it

"Primary residence" is the whole game

The surcharge applies unless the home is occupied more than half the year as the primary residence of:

① a covered owner, or ② an immediate family member of an owner — spouse, child, sibling, parent, grandparent or grandchild — or ③ a tenant under an arm's-length lease of at least 12 months who uses it as their primary residence.

LLCs and trusts do not shield you. The law looks through entities: trust beneficial owners and majority holders of LLCs, partnerships and corporations count as covered owners. But beware — where no individual owns a majority interest (common in family LLCs split among siblings), the property can be surcharged no matter who lives there, unless a qualifying tenant occupies it.

Vacant doesn't count. A unit "available for rent" without an actual qualifying lease is taxable. Neither do short stays, seasonal use, or Airbnb-style rentals.

Key dates

What happens next

July 1, 2026Surcharge in effect for fiscal year 2026–27.
By August 30, 2026Department of Finance mails initial non-primary-residence notices to owners it believes are covered. If you get one and the home is a primary residence, you can rebut with documentation — e.g. a tax return showing the address, or a qualifying 12-month lease.
January 1, 2027First year's surcharge due, collected with your property tax statement. Enforced like real property taxes — liens included.
July 1, 2028Phase 2: condos and co-ops shift to the market-value model.
June 30, 2031Scheduled sunset, unless Albany extends it.

Your options

Three legal ways out — and one expensive default

Option 1Make it primary

You — or an immediate family member — occupy the home more than half the year as a primary residence. Requires real documentation (tax filings, DMV, voter registration). Changes your state/city tax picture; coordinate with your CPA.

Option 2Rent it for 12+ months

An arm's-length lease of at least one year to a tenant who makes it their primary residence eliminates the surcharge and produces income. In today's record-rent market this often flips the unit from a liability to a yield. We lease it, vet the tenant, and paper it correctly.

Option 3Sell

If the unit no longer earns its keep, a recurring 4–6.5% of assessed value changes the math of holding. A senior Conquest agent will give you an honest, data-driven read on what your unit trades for right now — and whether selling beats leasing.

The defaultDo nothing

Pay the surcharge every year, on top of property tax, common charges and insurance — with no abatements applied against it. For most owners this is the worst option on the board.

Estimate it

Surcharge calculator

A quick estimate of your annual exposure under Phase 1. For condos and co-ops, enter the assessed value from your Notice of Property Value or tax bill (look yours up at nyc.gov/finance) — not your purchase price.

Estimates assume graduated brackets apply to value above each threshold and are informational only — not tax advice. Final DOF billing guidance may differ. We'll confirm your actual number in the free review.

Property type DOF assessed value ($)

Free exposure review

Find out exactly where you stand

Tell us the building and we'll come back to you — usually same day — with:

① your unit's actual DOF assessed value and whether the surcharge applies, ② your estimated annual surcharge for FY 2026–27 and under Phase 2, ③ a candid rent vs. sell analysis from a senior Conquest Advisors agent: what the unit would lease for on a qualifying 12-month lease, what it would sell for today, and which path leaves you further ahead.

No fee, no obligation, no listing pitch unless you ask for one. Prefer to talk? +1 (212) 777-9690.

Questions owners are asking

Pied-à-terre tax FAQ

Is this actually law, or another proposal that will die in Albany?

It is law. The Legislature passed it May 27, 2026; Governor Hochul signed it May 28, 2026 within the FY 2026–27 budget. It has been in effect citywide since July 1, 2026, sunsetting June 30, 2031 unless extended.

My condo cost $2.4M — am I over the $1M threshold?

Maybe, maybe not. The condo/co-op threshold uses the DOF assessed value, an income-derived figure that's typically well below sale price. Check your Notice of Property Value, or ask us and we'll pull it for you the same day.

I own through an LLC. Am I safe?

No. The law attributes ownership through LLCs, partnerships, corporations and trusts. And if no single person holds a majority of the entity, the unit can be taxed regardless of who lives there — unless a qualifying tenant occupies it. Multi-member family LLCs should review their structure now.

My daughter lives in the apartment. Do I owe the surcharge?

If she occupies it more than half the year as her primary residence, no — children are "immediate family members" under the law, as are spouses, siblings, parents, grandparents and grandchildren. Keep documentation.

What if the unit is listed for rent but empty?

Taxable. The exemption requires an actual arm's-length lease of at least 12 months to a tenant using it as a primary residence — not availability, not intent. This is a strong argument for leasing sooner rather than later.

Do my condo abatement or STAR benefits reduce the surcharge?

No. The statute says existing abatements, credits and exemptions do not apply against the surcharge. It stacks on top of your current bill.

What happens if I ignore the DOF notice?

The surcharge is billed and enforced like real property tax — interest and, ultimately, lien enforcement. If the notice is wrong, rebut it with proof of primary residence (tax return showing the address, or a qualifying lease). Deadlines will be on the notice; don't sit on it.

Will renting my apartment for a year really eliminate the tax?

Yes — a bona fide arm's-length lease of at least 12 months to a tenant who makes it their primary residence takes the unit out of the surcharge, and Manhattan rents are at or near record levels. We can tell you what your unit would fetch within a day.

Is it better to sell before January 1, 2027?

It depends on your assessed value, basis, and how you use the home. For some owners the recurring surcharge meaningfully changes the hold math; for others a lease solves it. That's exactly what the free review answers — with numbers, not vibes.

Deep dives

The story behind the tax

A Tax Twelve Years in the Making
The full 2014–2026 history: every failed push, and why it finally stuck.
How It Finally Passed Albany
Mamdani's video, Griffin's $6B threat, Hochul's balancing act.
The $238M Apartment That Started It All
220 Central Park South and the record deal that revived a dead bill.
2019 vs. 2026: What Actually Passed
How the enacted law differs from the proposals — and who it catches.
Mansion Tax vs. Pied-à-Terre Tax
One-time vs. every year: how NYC's luxury taxes now stack.

Sources

Primary sources & further reading

NY Governor's Office — Pied-à-terre tax announcement
NYC Comptroller — The Pied-à-Terre Tax and Its Potential Revenues
Dechert LLP — New York City Imposes Pied-à-Terre Tax (June 2026)
Katten Muchin Rosenman LLP — NYC Enacts Annual "Pied-à-Terre Tax" on Second Homes
NYC Dept. of Finance — Property value lookup (NOPV / assessed value)

This page is educational information from a licensed real estate brokerage, current as of July 17, 2026. It is not legal, tax or accounting advice — consult your attorney or CPA on your specific facts. We update this page as DOF issues implementation guidance.