NYC Affordability

What it is

The pied-à-terre tax is an annual surcharge on NYC residential property that isn’t anyone’s primary residence and is valued above a set threshold. Governor Hochul and Mayor Mamdani proposed it in April 2026, the Legislature passed it as part of the FY2027 state budget, and it took effect July 1, 2026. It is scheduled to sunset on June 30, 2031 unless it’s extended.

Three things make it different from the other NYC taxes on this site:

• It recurs every year you own the property. The mansion tax and mortgage recording tax are paid once, at closing. This one is billed alongside your regular property tax, year after year. The first bills go out in January 2027.
• Owner-occupants don’t owe it. If the home is the primary residence of the owner (or, for a home held in an entity, of the people who together hold a majority interest), the tax doesn’t apply. The law lists living there for a majority of days in the year as one factor, but lets the Department of Finance (DOF) set other criteria too.
• It’s based on DOF’s valuation, not your purchase price. That’s why the condo and co-op thresholds and rates look so different from those for houses (see below).

Who it applies to, and at what rate

The tax runs in two phases.

Phase 1 (July 1, 2026 through June 30, 2028):

Property type	Applies when DOF market value is…	Annual rate
Condo or co-op unit	$1,000,000 to $3,000,000	4.00%
Condo or co-op unit	$3,000,000 to $5,000,000	5.25%
Condo or co-op unit	Above $5,000,000	6.50%
1-3 family home	$5,000,000 or more	0.8% to 1.3%, tiered by value

Phase 2 (from July 1, 2028): DOF switches to valuing condo and co-op units by comparable sales. The threshold becomes roughly $5,000,000 for every property type, and rates move to the 0.8%–1.3% range.

Like the mansion tax, it’s a cliff, not a slope. Once a property crosses a threshold, the rate applies to its entire DOF value, not just the portion above the line.

Why the condo and co-op numbers look so high

DOF has historically valued condos and co-ops as if they were rental buildings (an income-capitalization method), not at what the units actually sell for. The result is that a unit’s DOF “market value” is often a small fraction of its sale price. For individually owned co-op units, legal analyses put it at 10% or less of true market value.

So a $1,000,000 DOF threshold for a co-op or condo is meant to reach units that actually sell for several million dollars. The higher phase-1 rates offset the lower valuation base. That also means you can’t tell from the listing price alone whether a unit is covered. Look up the unit’s DOF market value on its Notice of Property Value, or ask your attorney to.

Worked example

Take a condo you’d use as a second home, with a DOF market value of $1,500,000. Its likely sale price is far higher, since DOF values sit well below sale prices.

• Phase-1 bracket: $1,000,000–$3,000,000 → 4.00%
• Annual pied-à-terre tax: $1,500,000 × 4% = $60,000/year
• Monthly equivalent: $5,000/month, on top of common charges and regular property tax

The same unit owes $0 in pied-à-terre tax if it’s the owner’s primary residence. Change that one fact and the carrying cost changes by $60,000 a year. For budgeting, an unexpected ongoing cost at this scale matters far more than any one-time closing line item.

What to check before buying a non-primary residence

1. The unit’s DOF market value, not just the asking price. It sets both whether you’re covered and the rate.
2. Whether you’ll actually use it as your primary residence, and how you’d document that if DOF asks.
3. What happens in 2028. A unit under the phase-1 threshold today could be covered once DOF moves to comparable-sales valuation, and the reverse is possible too.
4. The sunset. The tax is set to expire June 30, 2031. That’s no guarantee it won’t be extended, so don’t underwrite a long hold on the assumption that it disappears.

DOF published its list of potentially affected properties on July 25, 2026, and mailed owner notices by the end of August 2026. If you already own a covered home that is in fact your primary residence, DOF’s exemption process is how you avoid the January 2027 bill. Rules and deadlines are still being implemented, so confirm your status with a tax attorney. Treat this page as orientation, not tax advice.