Co-authored by: Stephanny Avshalomov & Ian Lee
If you own a high-value residence in New York City that is not your primary home, a new tax may quite literally be knocking on your door.
Effective July 1, 2026, New York City’s Non-Primary Residence Property Surcharge, commonly referred to as the “Pied-à-Terre Tax,” took effect. On July 23, 2026, Mayor Zohran Mamdani and the New York City Department of Finance (“DOF”) began mailing notices to property owners who may be subject to the surcharge.
What is New York City’s Pied-à-Terre Tax?
The surcharge is imposed in addition to existing real property taxes on certain high-value residential properties that are not used as a qualifying primary residence. If applicable, the surcharge is expected to first appear on property tax bills due January 1, 2027.
The surcharge generally applies to one-, two- and three-family homes with a DOF market value of $5 million or more and condominium and cooperative units with a DOF market value of $1 million or more during Phase One, provided the property is not used as a qualifying primary residence. Beginning in Phase Two, covered condominium and cooperative units are expected to move to the $5 million threshold and the uniform rate structure below. The surcharge may apply regardless of whether the property is owned individually, through a trust, or through a business entity.
The surcharge generally does not apply if the property serves as the primary residence of the owner, a tenant or subtenant, an immediate family member of the owner, or one or more individuals who collectively hold a majority interest in the entity that owns the property.
How is the Surcharge Calculated?
The surcharge is imposed in two phases:
PHASE ONE (July 1, 2026 – June 30, 2028) | PHASE TWO (After July 1, 2028) | |
All One-, Two- and Three-Family Residences | Market value between $5 million and $15 million: 0.8% Market value between $15 million and $25 million: 1.05% Market value over $25 million: 1.3%
| Market value between $5 million and $15 million: 0.8% Market value between $15 million and $25 million: 1.05% Market value over $25 million: 1.3% |
Residential Cooperatives & Residential Condominiums | Market value between $1 million and $3 million: 4.0% Market value between $3 million and $5 million: 5.25% Market value over $5 million: 6.5% | Market value between $5 million and $15 million: 0.8% Market value between $15 million and $25 million: 1.05% Market value over $25 million: 1.3% |
During Phase One (July 1, 2026 through June 30, 2028), condominium and cooperative units are subject to higher surcharge rates than one-, two-, and three-family homes. Beginning July 1, 2028, all covered property types will be subject to the same valuation methodology and surcharge rates, as summarized above.
Practical Considerations for Property Owners.
If you receive a notice from the DOF indicating that your property may be subject to the surcharge, review it carefully. If you believe your property qualifies for an exemption, you must respond by the deadline stated in the notice and submit supporting documentation.
If you disagree with the Department’s determination of your property’s market value, you may also challenge the determination before the New York City Tax Commission.
Although the DOF is continuing to mail notices, property owners need not wait to receive one before assessing whether their property may be subject to the surcharge and whether they qualify for an exemption.
As the City continues implementing the new surcharge, questions remain regarding the valuation of condominium and cooperative units, the application of the residency rules and the treatment of properties held through trusts and other business entities.
Goetz Platzer LLP is monitoring these developments, and our attorneys are available to assist property owners in evaluating whether the surcharge applies, assessing potential exemptions, and interpreting the requirements of this new law.
[Sources: Office of the Mayor; NYC Department of Finance; See NYC Administrative Code §§ 11-3201-3208]
