Updated October 16, 2026. New York’s pied-à-terre tax is now part of the cost analysis for certain second homes. Its implementation is being challenged in court, but buyers and owners should not assume that the surcharge has been abolished.
An enacted tax, with implementation under appeal
The surcharge applies from July 1, 2026, under New York Tax Law § 1350. It is an annual charge on qualifying properties that are not used as primary residences.
On September 29, a trial court challenged the City’s rollout and ordered previously issued notices canceled. That ruling concerned implementation, rather than a blanket repeal of the tax. Bloomberg Tax reported on October 6 that the appeals court had put the ruling on hold while considering the appeal. At this update, DOF continues to publish implementation guidance.
Which properties may be affected?
For 2026–27 and 2027–28, the statutory thresholds are $5 million for qualifying Class 1 properties and $1 million for condominium and co-op units. These refer to the applicable DOF market value, not simply the asking price or purchase price. The statutory definitions explain the valuation rules and the separate framework from July 2028.
Published annual rates for the first two years
The following rates are applied to DOF market value for a property subject to the surcharge. They are not marginal brackets applied only to the excess above each threshold.
| Property | DOF value | Rate |
|---|---|---|
| 1–3 family home | $5m to below $15m | 0.8% |
| 1–3 family home | $15m to below $25m | 1.05% |
| 1–3 family home | $25m and above | 1.3% |
| Condo or co-op | $1m to below $3m | 4% |
| Condo or co-op | $3m to below $5m | 5.25% |
| Condo or co-op | $5m and above | 6.5% |
Source: NYC Department of Finance.
Primary residence use matters
A qualifying primary residence may be occupied by the owner, an eligible family member or a tenant. For tenant occupancy, the law requires a genuine, arm’s-length lease of at least one year. Holding a property through an LLC does not by itself settle the issue: ownership and actual use must be reviewed.
October’s deadline has passed
DOF states that the 2026–27 exemption application deadline was October 13, 2026. It currently says applicable charges will appear on the property tax bill due January 1, 2027. Receiving a preliminary notice or appearing on the supplemental roll does not automatically establish liability.
Separate appeal procedures remain. The NYC Tax Commission lists March 1, 2027 for Class 2 valuation appeals and March 15 for Class 1, with specific rules for appealing final residency determinations. These procedures are not an automatic extension of the DOF exemption deadline.
What this means for your property search
Before making an offer, review the property’s DOF value, intended occupancy and potential annual carrying costs with your attorney and tax adviser. Promest Realty can help you organize your New York property search and coordinate the real estate aspects of your acquisition.
This dated update is general information, not legal or tax advice. Rules, litigation and administrative guidance may change.
