NYC Pied-à-Terre Tax 2026: Who Pays, Rates and Next Steps

Last updated: October 6, 2026. This story is moving fast. We will update this page as the courts and the NYC Department of Finance act.

Status at a glance: The NYC pied-à-terre tax is law. The City plans to include it on property tax bills due January 1, 2027. A September 29 trial-court order that would have required the City to redo its notices is stayed pending appeal. Separate constitutional challenges are pending. If you received a Department of Finance (DOF) letter, the exemption application deadline is October 13, 2026.

Do you own a New York City apartment or townhouse that isn’t your full-time home? Then 2026 changed the math. The pied-à-terre tax, officially the “non-primary residence surcharge,” is a new annual charge on high-value NYC covered properties that do not qualify as a primary residence under the surcharge rules. For a condo or co-op owner, the bill can easily run to tens of thousands of dollars a year.

Here is what the law says, who pays, the rates, where the lawsuits stand, and your real options. We wrote it with our international clients in mind, from Europe and Latin America, because they often own exactly the kind of home this tax targets.

What is the NYC pied-à-terre tax?

Governor Kathy Hochul signed the surcharge into law on May 28, 2026 as part of the FY2027 New York State budget (Part HH of Chapter 59 of the Laws of 2026). It adds Article 30-C to the State Tax Law and a parallel chapter to the NYC Administrative Code (Title 11, Chapter 32). It applies to city fiscal years from July 1, 2026 through June 30, 2031, when it is scheduled to expire unless extended. The State expects it to raise at least $500 million a year for New York City.

The NYC Department of Finance runs it. DOF identifies covered properties, values them, and adds the surcharge to the owner’s property tax bill. The surcharge is enforced like real estate tax, which means liens are possible. Two points stand out:

• What counts is how the home is used, not who owns it. Foreign owners face no special rule and get no special exemption.
• It is charged on top of your property tax. Abatements, credits and exemptions that reduce ordinary property tax do not reduce the surcharge.

Which properties are covered?

Under Tax Law §1351, “covered property” means:

• Class one one-, two- and three-family homes (townhouses, brownstones, houses), other than vacant land
• Residential condominium dwelling units
• Residential cooperative dwelling units (in a co-op building where at least one unit meets the value threshold and is not a primary residence)

Excluded property under the statute is narrow: units that still lack a required temporary or permanent certificate of occupancy, and unsold sponsor condominium or co-op units still subject to an offering plan that have not been sold or transferred by the sponsor. Commercial property and hotels are outside the covered-property definitions. There is no blanket exclusion for “rental buildings”—a rented condo, co-op or house can still be covered unless a qualifying occupant uses it as a primary residence on the taxable status date (see below).

Who pays, and who is exempt?

You owe the surcharge if the property is at or above the value threshold and was not a primary residence on the taxable status date.

Taxable status date. Under Tax Law §1351(q), the taxable status date is January 5 immediately preceding the start of the applicable fiscal year. For fiscal year 2026–27 (bills due January 1, 2027), that date is January 5, 2026. For fiscal year 2027–28, it is January 5, 2027.

That timing matters. Renting out, moving in, or selling the property now does not automatically eliminate the 2026–27 surcharge. Those steps can change status for a later fiscal year if the property qualifies as of the next status date—but they do not rewrite the January 5, 2026 snapshot that governs the first bill.

Under Tax Law §1351(m), the property is not subject to the surcharge if, as of that January 5, it was the primary residence of any of the following:

• A covered owner who is a natural person (owner of a Class 1 home, condo unit owner, or co-op tenant-stockholder)
• An immediate family member of such a covered owner: a spouse, child, sibling, parent, grandparent or grandchild
• A tenant or subtenant who is a natural person, occupying under a bona fide lease negotiated at arm’s length with a term of not less than one year (short-term and seasonal stays do not qualify)
• Where the property is held by a partnership, corporation or LLC, one or more partners, shareholders or members who hold a majority interest and use it as their primary residence
• Where the property is held in trust, the sole beneficiary or beneficiaries of the trust, if they use it as their primary residence

Entity and trust rules are detailed; have the ownership structure reviewed by counsel.

Proof is documentary. Examples include a tax return listing the address or a DMV-issued ID. Tenant claims also need the lease (or a tenant/subtenant affidavit) plus rental documents; family claims need proof of the relationship. DOF can audit certifications for up to six years. Penalties can reach 50% of the surcharge for materially inaccurate filings made negligently or in bad faith.

Who is most exposed: owners who live mainly outside NYC—whether in another state, Europe or Latin America—and keep the home for their own visits, with no long-term qualifying tenant or family member living there as of the January 5 status date.

Surcharge residency is not income-tax residency. Whether a property is a “primary residence” for this surcharge is a separate question from whether you are a New York State or New York City income-tax resident. Claiming or establishing primary residence for the surcharge can have income-tax consequences, but the tests are not identical. Get advice before changing how you use or report the property.

NYC pied-à-terre tax rates (2026–27 and 2027–28)

Rates for the first two fiscal years are set by Tax Law §1353(a). Under the statute, brackets use “greater than or equal to … but less than or equal to” (or “greater than …”) language, so the rate at an exact boundary follows the statutory text. DOF’s published table differs from the statute at certain exact thresholds; see the note below.

Statutory source: N.Y. Tax Law §1353. DOF also publishes a public rates table; see the note below on a boundary discrepancy.

The rate applies to the entire phase one market value, not just the amount above the threshold. Three examples under the statute:

• A condo with a DOF value of $2,000,000 is in the ≥$1M and ≤$3M bracket and pays 4%, or $80,000 a year.
• At exactly $3,000,000, a condo remains in the ≤$3M bracket and pays 4%, or $120,000—not 5.25%. At $3,000,001 it moves into the next bracket (5.25%). Bracket lines matter.
• A townhouse at $6,000,000 pays 0.8%, or $48,000 a year.

Note on the DOF table: DOF’s published table describes the condo/co-op middle bracket as “$3,000,000 or greater, but less than $5,000,000” at 5.25%. Tax Law §1353(a)(2) instead puts values “greater than three million dollars, but less than or equal to five million dollars” at 5.25%, and values “greater than or equal to one million dollars, but less than or equal to three million dollars” at 4.0%. Where the DOF table and the statute conflict at the $3 million line, prefer the statutory text. Owners should confirm the amount DOF will bill with DOF or counsel.

Phase two: from July 1, 2028

From fiscal years beginning on or after July 1, 2028, Tax Law §1353(b) applies a single set of rates to all covered property using phase two market value: 0.8% for ≥$5M and ≤$15M; 1.05% for >$15M and ≤$25M; 1.3% for >$25M. The $5 million threshold applies across property types. For condos and co-ops, phase two market value is determined using a comparable-sales method defined for this surcharge (Tax Law §1351(l)).

Those July 1, 2028 valuation and threshold changes apply specifically to this surcharge. They do not, by themselves, rewrite how DOF assesses property for ordinary NYC property tax under other statutes—unless and until those separate rules change.

How DOF determines value (and why $1M is not a typo)

In phase one, DOF values condos and co-ops using its existing income-capitalization approach for Class 2 (as if they were rental buildings). That method usually produces a “market value” well below the sale price, which is why phase one uses a lower threshold and higher rates for them.

• Condos: each unit has its own DOF market value, shown on your Notice of Property Value.
• Co-ops: DOF values the building and allocates value to each unit by its share count. The co-op is billed and collects from the shareholder.
• Townhouses: DOF uses its sales-based Class 1 market value.

Think the value is wrong? You can appeal to the NYC Tax Commission (Form TC107). For the 2026/27 and 2027/28 tax years, the Tax Commission filing deadline is March 1, 2027 for Tax Class 2 (condos and co-ops) and March 15, 2027 for Tax Class 1 (1–3 family homes) when appealing market value (with or without residency). If you first seek an exemption from DOF and then appeal DOF’s final residency determination, you may file with the Tax Commission by the applicable March deadline or within 30 days of the date on DOF’s final determination notice, whichever is later. A market-value challenge must still meet the March deadline. Only one surcharge appeal may be filed with the Tax Commission for any one year.

Key dates

• January 5, 2026: taxable status date for FY2026–27
• May 28, 2026: law signed (Part HH, Ch. 59, Laws of 2026)
• July 24, 2026: DOF publishes supplemental market value roll
• October 13, 2026: DOF exemption application deadline (for owners who received a notice)
• January 1, 2027: first surcharge due on property tax bills
• January 5, 2027: taxable status date for FY2027–28
• March 1, 2027: Tax Commission surcharge appeal deadline (Class 2)
• March 15, 2027: Tax Commission surcharge appeal deadline (Class 1)
• July 1, 2028: phase two begins (surcharge-specific valuation/thresholds)
• June 30, 2031: scheduled sunset

The lawsuits: where things stand

High-level status (as of October 6, 2026):

• The surcharge is law.
• The City plans January 1, 2027 billing on property tax bills.
• In O’Brien v. City of New York, a September 29, 2026 trial-court order concerning DOF’s notices was stayed pending appeal in the Appellate Division.
• Separate constitutional challenges filed in Suffolk County against the State remain pending.
• DOF’s exemption application deadline is October 13, 2026 for owners who received a notice.

None of these cases has struck the tax down. Do not miss a deadline because of the litigation.

Your options: scenarios for owners

Remember: for the 2026–27 bill, status was fixed as of January 5, 2026. Actions you take now generally affect future fiscal years (starting with the next January 5), not the current-year surcharge already in motion.

1. Keep it and pay. If the home is a long-term family asset, the cost may be worth it. First check your DOF value: an error, or a value just over a bracket line, can change the bill significantly.

2. Rent it on a qualifying lease. A natural-person tenant who uses the home as their primary residence under a bona fide arm’s-length lease of at least one year can keep it out of the surcharge for a future fiscal year if that occupancy is in place as of the relevant January 5. Short-term or seasonal stays do not count. Co-op and condo leasing rules apply, and rental income has its own tax consequences for non-US owners. Renting now does not erase the 2026–27 surcharge.

3. Family use. If an immediate family member genuinely lives there as their primary residence as of the applicable January 5, the surcharge does not apply for that fiscal year. Keep the paperwork in order. Moving a family member in now does not automatically clear the 2026–27 bill.

4. Make it your primary residence. Only if you truly move. Surcharge “primary residence” status is separate from New York State and City income-tax residency, but establishing New York as your real home often has income-tax consequences. For international owners, it can also affect US and home-country tax status—get cross-border advice first. Moving in after January 5, 2026 does not eliminate the 2026–27 surcharge.

5. Sell. Selling now does not automatically cancel the 2026–27 surcharge already determined from the January 5, 2026 status date; allocate responsibility for any billed surcharge in the contract and at closing. Buyers who will make the home their primary residence as of a future January 5 can keep it out of the surcharge going forward, which can widen the buyer pool. Expect buyers in the affected segment to price the surcharge risk into offers.

6. Sell and relocate, for example to Miami. For some owners, the surcharge prompts a broader question about where home really is. Florida has no state personal income tax. Cosmore’s Miami headquarters and New York office can assist on both sides and coordinate mortgage, title and insurance through independent specialist providers. It isn’t right for everyone, but it is worth modeling. Start with our guide to buying in South Florida.

FAQ

Is the NYC pied-à-terre tax in effect?

Yes. The law was signed May 28, 2026, and the City plans the first payment with the January 1, 2027 property tax bill. Lawsuits are pending, but none has struck the tax down.

How much is the pied-à-terre tax on a NYC condo?

Under Tax Law §1353(a), for 2026–27 and 2027–28 condo and co-op units pay 4.0% of phase one market value from $1 million through $3 million (inclusive), 5.25% above $3 million through $5 million, and 6.5% above $5 million. A $2 million DOF value means $80,000 a year. A condo valued at exactly $3 million pays 4% ($120,000), not 5.25%. Confirm against DOF’s bill and counsel if a published table differs.

Does renting out my NYC apartment avoid the tax?

Only if a natural-person tenant uses it as their primary residence under a bona fide arm’s-length lease of at least one year, as of the applicable January 5 status date. Renting after January 5, 2026 does not automatically eliminate the 2026–27 surcharge.

Do foreign owners have to pay the NYC pied-à-terre tax?

Nationality doesn’t matter. Foreign owners pay if the property is at or above the threshold and isn’t the primary residence of a covered owner, an immediate family member, a qualifying tenant, a majority entity owner, or a sole trust beneficiary—as the statute provides.

Is there a NYC pied-à-terre tax list?

DOF published a supplemental market value roll on July 24, 2026. Appearing on it does not mean you owe the surcharge. DOF notifies owners it believes may be subject to the surcharge separately.

Talk to Cosmore’s New York team

Do you own a NYC second home, or plan to buy or sell one? Book a confidential strategy call with Cosmore New York. We’ll review your property’s value and exposure and map out sell, rent and hold scenarios. Cosmore can then coordinate the next steps—including mortgage, title and insurance—through independent specialist providers, in New York or Miami.

Contact Cosmore New York

Disclaimer: This article is provided for illustrative and informational purposes only and does not constitute legal, tax or financial advice. The surcharge rules and the related litigation are still evolving. Interested clients are encouraged to consult a qualified New York attorney or tax professional to confirm this information and evaluate their specific situation before making any decision.