NYC Pied-a-Terre Tax 2026: Who Pays and How Much

New York City now charges an annual surcharge on expensive homes that are nobody's primary residence. The law took effect on May 28, 2026, and the Department of Finance (DOF) applies it to the 2026/27 and 2027/28 property tax years. For a condominium or co-op unit, it starts at 4.0% of DOF market value per year once that value reaches $1 million.

That makes the owner who keeps a Manhattan apartment empty for most of the year, and lives in Tokyo, London or Singapore, the person this tax was written for. Below we set out the rates, the exemptions, how ownership through an LLC or trust is treated, and the dates that still matter.

1. Rates and Thresholds: DOF Market Value, Not Purchase Price

The surcharge applies to two kinds of property. One- to three-family homes are covered from a DOF market value of $5 million. Condominium and co-op units are covered from a DOF market value of $1 million. The rates are tiered by that value.

The rate applies to the whole value

This is not a marginal tax. DOF's final rule states that once a property crosses the threshold, the entirety of the property's value is subject to the surcharge. A condo with a DOF market value of $1.2 million owes 4.0% of $1.2 million, or $48,000 a year, on top of its regular property tax.

The value that counts is DOF's, not the price you paid. State law has DOF value condos and co-ops as if they were rental buildings, so their market values sit well below sale prices. DOF itself describes a $1 million condo or co-op value as roughly comparable to a $5 million house.

Your figure is on the Notice of Property Value DOF mails each January; our NYC condo property tax guide explains how it is built.

2. Who Is Exempt: The Test Is Who Lives There

The surcharge does not apply if the property is the primary residence of one of five kinds of people. DOF lists them as follows:

1. The owner. 2. A tenant or subtenant. 3. One or more individuals who together hold a majority interest in the LLC, corporation or partnership that owns the property. 4. An immediate family member of the owner or of a majority interest holder. 5. The sole beneficiary or beneficiaries of a trust that owns it.

As the list shows, an owner who lives abroad and visits a few weeks a year fits none of these categories. An apartment kept empty between visits is, in principle, inside the tax. The same unit is exempt if a family member lives there as their main home, or if it is let to a tenant who actually lives in it.

What counts as proof

Proof starts with each occupant's most recently filed federal or state income tax return, or a driver's license or other ID issued by a state DMV. Tenants add a current lease and one other rental document, such as a utility bill or proof of rent payment.

Family members add proof of the relationship, and entities add their operating agreement, trust agreement or articles plus a Majority Interest Affidavit.

3. LLCs, Trusts and Leases: Changing the Name on Title Changes Nothing

Holding the apartment through an entity does not avoid the surcharge. The test follows the people who live there, not the name on the deed. If an LLC owns the unit, the exemption applies only when individuals holding a majority interest make it their primary residence.

The final rule closes the obvious structures. It says an individual cannot establish primary residency through a multi-tier business entity ownership structure, so a foreign company owning a US LLC that owns the unit does not qualify.

For a trust, the people living there must be its sole beneficiaries. Owners using an LLC for liability reasons should still read our guide to using an LLC for rental property.

Renting it out

A lease can produce an exemption, with conditions. The tenant must be a natural person, not a business entity such as an LLC, which matters for corporate housing leases signed by an employer. A lease entered into primarily to avoid the surcharge does not count, and the rule sets a penalty of 50% of the surcharge for a misleading or inaccurate certification.

Short stays are not a way round it either. Under Local Law 18, rentals of fewer than 30 days require a registered host who lives in the unit and is present, so an empty apartment cannot be let nightly. Our guide to leasing your condo covers the building rules that come first.

4. Deadlines, Bills and the Lawsuits

DOF published a supplemental roll of properties that may be subject on July 24, 2026, and mailed notices to owners it believes owe the surcharge. Brownstoner reported on October 6, 2026 that about 17,000 properties were initially tagged, about 9,300 applications had been received and more than 5,200 properties had been found to be primary residences.

The DOF exemption application deadline was extended more than once, most recently to October 13, 2026. Any surcharge appears on the property tax bill due January 1, 2027, and Brownstoner reported that the first bills are set to go out on November 15.

An owner who missed the DOF deadline or was denied still has the Tax Commission. Residency can be argued there only alongside a challenge to the market value, which links this tax to the ordinary NYC property tax appeal process. A lower DOF value lowers the surcharge directly, because the rate applies to the full value.

The legal challenges

Owners have gone to court. Brownstoner reported that a Staten Island judge ordered the process redone, that an appellate justice allowed the city to keep collecting while it appeals, and that two further suits challenging the surcharge's constitutionality are pending, one arguing that it discriminates against out-of-state owners.

Those arguments may yet succeed, but for now the city is issuing the bills, and owners should plan on paying unless an exemption or a court decision says otherwise.

5. Final Thoughts: A Broker's View

A broker's view, from Satoshi Onodera, a licensed New York real estate broker and the founder of Reinvent NY. What changed in 2026 is the cost of keeping a high-value apartment empty. An owner abroad now has three options: accept the surcharge and keep the unit, let it to someone who makes it their home, or sell and buy something below the threshold or outside the tax.

For buyers, one step has moved up the checklist. Look up the DOF market value of the unit you are considering before you make an offer, and weigh it alongside price, common charges and the 30-day rental rule. For the wider costs of part-time ownership, see our pied-a-terre guide and our process guide to buying property in NYC as a foreign buyer.

Reporters: for comment on this topic, see our press page.

Reinvent NY provides business consulting, operational support, and coordination services. Legal advice and immigration filings are handled by independent licensed attorneys. Real estate services are provided through licensed professionals and applicable brokerage relationships. This article is for informational purposes only and does not constitute legal or investment advice.

More on US property tax: 1031 Exchange in 2026, CEMA Loans in New York, 421-a Tax Abatement.