NYC’s “Pied-à-Terre Tax”
New York City imposes a new annual surcharge on certain high-value properties that aren’t used as primary residence, commonly referred to as “pied-à-terre tax. Here’s a clear breakdown of who it hits, how much it costs, and what to do if you’ve received a letter from the Department of Finance (DOF).
Who is subject to the surcharge and exemptions
For property tax years 2026-27 and 2027-28, the surcharge may apply to:
- One-, two-, and three-family homes valued by DOF at more than $5 million
- Condominium and cooperative units valued by DOF at $1 million or more
The test is not whether you rent the property out, use it occasionally, or own it as an investment. It’s whether the unit is someone’s primary residence.
Your property will not be subject to the surcharge if it is the primary residence of any of the following:
- The property owner
- A tenant or subtenant
- One or more individuals who collectively hold a majority interest in the LLC, corporation, or partnership that owns the property
- An immediate family member of the owner or majority interest holder
- The sole beneficiary (or beneficiaries) of a trust that owns the property
How Much Will It Cost?
The surcharge is calculated as a percentage of the property’s DOF-determined market value, on a sliding scale:
One-, two-, and three-family homes:
| Market Value | Surcharge Rate |
|---|---|
| $5,000,000 – under $15,000,000 | 0.8% |
| $15,000,000 – under $25,000,000 | 1.05% |
| $25,000,000 or more | 1.3% |
Condominium and cooperative units:
| Market Value | Surcharge Rate |
|---|---|
| $1,000,000 – under $3,000,000 | 4.0% |
| $3,000,000 – under $5,000,000 | 5.25% |
| $5,000,000 or more | 6.5% |
For instance, a $6 million condo used only as a second home would owe roughly $390,000 a year. The surcharge will show up as a line item on the property tax bill due January 1, 2027.
Received a letter? Contact Sishodia PLLC
DOF published a list of properties that could potentially be subject to the surcharge. However, appearing on that roll alone does not mean you owe anything. The real trigger is an actual letter from DOF.
If you received a letter, you may qualify for an exemption. Documentation requirements have gotten more detailed as DOF has finalized its rules, are specific to your situation and varies depending on who’s living in the unit. Getting the wrong combination of documents in front of DOF, or missing a filing nuance, can mean a denied application and a costly surcharge that could otherwise have been avoided.
At Sishodia PLLC, we review letters, determine whether an exemption is likely, and handle the filing so nothing gets missed before the deadline.
If you disagree with the property’s valuation, you have a strategic decision to make. DOF’s appeal process only looks at whether the property is a primary residence, it can’t rule on value at all. If value is also in dispute, you have two options: file separately with DOF (residency) and the Tax Commission (valuation), or bring both issues to the Tax Commission together in one case. Combining them is simpler and avoids DOF and the Tax Commission reaching different conclusions on the same facts but it comes at a cost: once you take the residency question to the Tax Commission, you can no longer pursue it through DOF. If you go the DOF route instead and your exemption is denied, you can still appeal that denial to the Tax Commission afterward.
At Sishodia PLLC we help owners navigate exactly this: choosing the strategy that fits their situation. If you received a letter, contact us before October 6, 2026.
Current Status: Litigation Update
The surcharge’s rollout is currently being contested in Court. On August 10, 2026, a Richmond County Supreme Court Judge granted a temporary restraining order blocking DOF from enforcing the surcharge, after a group of homeowners sued alleging the City failed to follow required notice procedures before publishing its supplemental valuation roll and mailing notices.
The City immediately moved to appeal, and on August 13, 2026 the Appellate Division, Second Department temporarily stayed that order, meaning enforcement, including the September 18, 2026 exemption-application deadline, currently remains in effect while the litigation proceeds. The case is scheduled for a show-cause hearing on August 31, 2026, at which the City must justify why a permanent order should not be entered invalidating the notices and the supplemental roll. The outcome is uncertain, and procedures or deadlines may change as the case develops.
Do not take a chance: we help you navigate the uncertainty and deadlines with confidence. Contact us at (833) 616-4646.
This information is current as of the publication date above. With litigation still ongoing, deadlines or requirements may change. Please consult with your attorney to confirm the most up-to-date rules.
Reference : https://www.nyc.gov/site/finance/property/non-primary-residence-surcharge.page
